How Funding Works
- Member Stock – Members buy FHLBank stock as part of membership, providing capital for lending.
- Debt Issuance – FHLBanks raise funds by issuing securities, known as consolidated obligations, in global capital markets.
- Managed by the Office of Finance, which issues and services all FHLBank debt.
- Debt includes consolidated bonds and consolidated discount notes.
- Investors – Buyers include central banks, asset managers, corporations, insurance companies and pension funds, government agencies, and other financial institutions.
- Use of Funds – Proceeds primarily fund advances and other FHLBank liquidity products.
Safety and Reliability
- Consolidated Obligations are backed by the financial resources of the FHLBanks and are not obligations of the federal government.
- Joint and Several Liability – All 11 FHLBanks share responsibility for every bond, ensuring debt repayment even if one bank cannot contribute.
This structure enhances investor confidence and the overall safety of the FHLBank System.