FHLB Announces Stock Buyback
CHICAGO - (02/14/05) -- The Federal Home Loan Bank ofChicago said last week it will buy back as much as $1.5 billion ofits voluntary stock over the next three years as part of a newcapital plan agreed to with its federal regulator, the FederalHousing Finance Board. The capital plan is aimed at finding a newsource of funding for the Chicago's bank's Mortgage PartnershipFinance program, growing into a major source of funding for thesecondary mortgage market. The Chicago bank has used excess, orvoluntary, stock to capitalize its MPF portfolio and has agreed toreduce its reliance on voluntary stock as part of the capital plan.The plan will draw down the voluntary stock from the current 55% to43% of the bank's capital, according to David Feldhaus, spokesmanfor the bank. "We rely more on voluntary stock than most home loanbanks," Feldhaus told The Credit Union Journal. The stock has a parvalue of $100 a share, the same as when it was introduced in 1932.The Chicago bank has 880 members, including 80 creditunions.