UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of Earliest Event Reported): |
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September 27, 2019 |
Federal Home Loan Bank of Topeka
(Exact name of registrant as specified in its charter)
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Federally Chartered Corporation |
000-52004 |
48-0561319 |
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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500 SW Wanamaker Road, Topeka, Kansas |
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66606 |
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(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: |
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785.233.0507 |
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Not Applicable
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 8.01 Other Events.
On September 27, 2019, the Federal Housing Finance Agency (“FHFA”), the primary regulator of the Federal Home Loan Banks (“FHLBanks”), including the Federal Home Loan Bank of Topeka (the “FHLBank”), issued a Supervisory Letter to the FHLBanks providing among other things that, by March 31, 2020, the FHLBanks should cease entering into certain instruments referencing the London Interbank Offered Rate, or LIBOR, that mature after December 31, 2021.
A copy of the FHLBank’s notice to its members regarding the FHFA’s letter to the FHLBanks as well as a copy of the FHFA’s letter are included herein as Exhibits to this Current Report on Form 8-K.
The FHLBank is evaluating the potential impact, if any, of the Supervisory Letter on its financial condition and results of operations.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Letter from the FHLBank to its members dated September 27, 2019.
99.2 Supervisory Letter from the FHFA to the FHLBanks dated as of September 27, 2019.
Exhibit Index
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Exhibit No. |
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Description |
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Letter from the FHLBank to its members dated September 27, 2019. Supervisory Letter from the FHFA to the FHLBanks dated as of September 27, 2019.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Federal Home Loan Bank of Topeka |
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September 27, 2019 |
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By: |
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/s/ William W. Osborn |
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Name: William W. Osborn |
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Title: Senior Vice President and Chief Financial Officer |
Exhibit 99.1
FHLBank System Regulator Provides LIBOR Transition Guidance
The financial markets are preparing for the expected phase-out of the London Interbank Offered Rate (LIBOR) by the end of 2021.
As part of this transition, the Federal Housing Finance Agency (FHFA) recently issued a supervisory letter to all Federal Home Loan Banks (FHLBanks). The FHFA, which regulates the FHLBanks, has required that by March 31, 2020, the FHLBanks cease entering into new LIBOR referenced instruments with maturities beyond December 31, 2021. This change may impact certain FHLBank products with a LIBOR component, including convertible and other structured advances containing embedded optionality as well as adjustable rate advances that reference LIBOR. Additionally, some adjustable rate advances tied to alternative indexes are not yet available to members.
The transition away from LIBOR-reliant advances does not lessen the reliability of FHLBank advance funding as the FHLBank System currently issues debt and accesses derivatives tied to alternative reference rates. The financial markets are also evolving to allow us to counter some of these limitations and we will keep you informed.
The FHFA has also directed the FHLBanks to update their pledged collateral certification reporting requirements by March 31, 2020, in an effort to encourage members to distinguish LIBOR-linked collateral maturing past December 31, 2021.
The full letter from the FHFA is available for your reference on the FHFA site.
The 11 FHLBanks are participating in industry-wide efforts to facilitate an orderly transition to an alternative reference rate. Each FHLBank has developed a multi-year plan to reduce its LIBOR exposures over time.
As we prepare for this transition, we also want to ensure that you, our members, are as prepared as possible. Resources regarding the LIBOR transition are available on our website.
We will provide you with ongoing updates as new information and resources become available. If you have questions regarding this communication or would like more details on the LIBOR transition, please contact your regional account manager or the Lending department at 800.809.2733.
Federal Housing Finance Agency
Constitution Center
400 7th Street, S.W.
Washington, D.C. 20219
Telephone: (202) 649-3800
Facsimile: (202) 649-1071
www.fhfa.gov
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To: |
Federal Home Loan Bank Presidents and Chief Executive Officers President and Chief Executive Officer, Office of Finance |
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From:Andre D. Galeano, Deputy Director
Division of Federal Home Loan Bank Regulation Subject:Supervisory Letter - Planning for LIBOR Phase-Out Date:September 27, 2019
To ensure that the Federal Home Loan Banks (FHLBanks or Banks) will be able to identify and prudently manage the risks associated with the termination ofLIBOR in a safe and sound manner, the FHLBanks should, by March 31, 2020, no longer enter into new financial assets, liabilities, and derivatives that reference LIBOR and mature after December 31, 2021 for all product types except investments. For investments, the FHLBanks should, by December 31, 2019, stop purchasing investments that reference LIBOR and mature after December 31, 2021. The above phase-out dates do not apply to collateral accepted by the FHLBanks.
Each Bank should report to the Division of FHLBank Regulation (DBR) any new LIBOR-based transactions maturing after December 31, 2021 into which it enters. This reporting should be done on a month-end basis beginning with October 2019. Each Bank should encourage its members to distinguish collateral linked to LIBOR with maturies beyond 2021 by updating collateral certification reporting requirements by March 31, 2020.
Recognizing that there may be LIBOR-indexed, long-dated products that serve a compelling mission, risk-mitigating, and/or hedging purpose (e.g., swaptions) that do not currently have readily available alternatives, DBR requests the FHLBanks jointly submit a single list ofLIBOR indexed products maturing after 2021 that they would like to continue to use after March 31, 2020. This list should not include derivatives FHLBanks acquire to offset market risks from structured advances products. For each product submitted to DBR, the Banks should include a statement
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explaining how they will manage the risks the products present and how the products serve the mission of the FHLBanks.
If you have any questions, please contact your examiner-in-charge, Associate Director of Examinations, or Daniel E. Coates, Senior Associate Director and Chairman of the FHFA's Reference Rate Transition Steering Committee at Daniel.Coates@fhfa.gov or 202-649-3280.