Corporate Finance

FHLB Cincinnati Details Consolidated Bond Commitments in SEC Filing

A Federal Home Loan Bank of Cincinnati filing identifies Consolidated Bonds for which it is the primary obligor and outlines the reporting limits of its issuance schedule.

By Carter Hayes ·

Key takeaways

  • The filing lists Consolidated Bonds committed to be issued for which Federal Home Loan Bank of Cincinnati is the primary obligor.
  • The schedule includes both non-callable bonds and bonds with optional principal-redemption features.
  • The listed bonds use fixed, constant rate terms.
  • The filing says Consolidated Obligations are supported by the financial resources of the Federal Home Loan Banks and are not guaranteed by the U.S. government.

Filing covers bond commitments

Federal Home Loan Bank of Cincinnati filed a Form 8-K describing Consolidated Bonds committed to be issued by the Federal Home Loan Banks for which the Cincinnati bank is the primary obligor. The schedule identifies trade, settlement and maturity information, along with rate and call characteristics for the listed securities.

The bank said it obtains most of its funding through debt securities known as Consolidated Obligations. Those obligations include Consolidated Bonds and Consolidated Discount Notes.

Schedule shows different call structures

The filing’s schedule identifies non-callable bonds as well as bonds subject to optional principal redemption. The callable securities are identified as having an American redemption style.

According to the filing’s explanatory material, American-style bonds can be redeemed continuously from the first redemption date through maturity. The schedule also identifies the listed instruments as fixed, constant-rate bonds.

Company notes limits of the disclosure

Federal Home Loan Bank of Cincinnati said the schedule does not address interest-rate exchange agreements or other derivative instruments that may be associated with reported bonds. The filing also says the schedule is not designed to track changes in the total Consolidated Bonds outstanding for which the bank is the primary obligor.

The reported principal amounts are stated at par and may differ from amounts in financial statements prepared under generally accepted accounting principles because par amounts do not reflect items such as discounts, premiums or concessions. Consolidated Discount Notes issued in the ordinary course of business are not included in the schedule because of their short-term maximum maturities.

Obligations are not federally guaranteed

The filing states that Consolidated Obligations are joint and several obligations of the Federal Home Loan Banks under Federal Housing Finance Agency regulations. They are sold publicly through the Office of Finance using authorized securities dealers.

The obligations are backed only by the financial resources of the Federal Home Loan Banks, according to the filing, and do not have a guarantee from the U.S. government.