The Federal Housing Finance Board this week approved an application by the Federal Home Loan Bank of Chicago to float $1 billion of subordinated debt in order to finance the purchase of excess stock from its member banks and credit unions. The deal will be the first time an FHLB has issued debt not backed by the entire FHLB system and its 12 banks.
The Chicago FHLB plans to issue the 10-year debt in June and it will be used solely to buy back the excess stock.
The Chicago bank is the originator of the Mortgage Partnership Finance program, the FHLB's own secondary market that has been imitated by the other 11 FHLBs.
The Journal's Ed Roberts can be contacted at eroberts
