The Federal Home Loan Bank of San Francisco -- a government-sponsored enterprise with superior credit quality -- is considering selling a $200 million tax-exempt letter of credit, a move that would substantially increase the bank's presence in the municipal market.

"One large customer has asked us for an availability for [about $200 million]," said Gary L. Curley, senior vice president of financial services at the Federal Home Loan Bank of San Francisco. "There has been some upturn in business recently."

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