Consolidated Obligations

Consolidated obligations are the joint and several obligations of the FHLBanks and consist of consolidated obligation bonds and discount notes. Consolidated obligations are backed only by the financial resources of the 12 FHLBanks. Consolidated obligations are not obligations of, nor are they guaranteed by, the U.S. government. The FHLBanks issue consolidated obligations through the Office of Finance as their agent. In connection with each debt issuance, one or more of the FHLBanks specifies the amount of debt it wants issued on its behalf; the Bank receives the proceeds of only the debt issued on its behalf and is the primary obligor for only the portion of bonds and discount notes for which it has received the proceeds. The Bank records on its statements of condition only that portion of the consolidated obligations for which it is the primary obligor. Consolidated obligation bonds are issued primarily to raise intermediate- and long-term funds for the FHLBanks and are not subject to any statutory or regulatory limits on maturity. Consolidated obligation discount notes are issued to raise short-term funds and have maturities of one year or less. These notes are issued at a price that is less than their face amount and are redeemed at par value when they mature. For additional information regarding the FHLBanks’ joint and several liability on consolidated obligations, see Note 15.

The par amounts of the 12 FHLBanks’ outstanding consolidated obligations, including consolidated obligations held as investments by other FHLBanks, were approximately $721 billion and $688 billion at September 30, 2013 and December 31, 2012, respectively. The Bank was the primary obligor on $28.6 billion and $32.6 billion (at par value), respectively, of these consolidated obligations.

Interest Rate Payment Terms. The following table summarizes the Bank’s consolidated obligation bonds outstanding by interest rate payment terms at September 30, 2013 and December 31, 2012 (in thousands, at par value).



	September 30, 2013		December 31, 2012
Fixed-rate	$	15,204,410	$	18,763,230
Variable-rate	4,171,000		4,235,000
Step-up	2,610,000		2,475,000
Step-down	100,000		100,000
Total par value	$	22,085,410	$	25,573,230

At September 30, 2013 and December 31, 2012, 89 percent and 91 percent, respectively, of the Bank’s fixed-rate consolidated obligation bonds were swapped to a variable rate and 1 percent and 16 percent, respectively, of the Bank’s variable-rate consolidated obligation bonds were either swapped to a different variable-rate index or hedged with interest rate swaps that contain embedded caps that offset interest rate caps embedded in the bonds.

Redemption Terms. The following is a summary of the Bank’s consolidated obligation bonds outstanding at September 30, 2013 and December 31, 2012, by contractual maturity (dollars in thousands):



	September 30, 2013					December 31, 2012
Contractual Maturity	Amount			Weighted Average Interest Rate		Amount			Weighted Average Interest Rate
Due in one year or less	$	13,138,535		0.72	%	$	9,618,500		0.60	%
Due after one year through two years	3,010,800			1.32		10,277,745			0.90
Due after two years through three years	1,072,000			2.21		1,619,985			1.79
Due after three years through four years	445,000			0.91		450,000			4.24
Due after four years through five years	1,207,000			2.13		425,000			1.09
Due after five years	3,212,075			1.81		3,182,000			2.21
Total par value	22,085,410			1.11	%	25,573,230			1.07	%

Premiums	47,545					83,833
Discounts	(4,802		)			(6,149		)
Hedging adjustments	(86,157		)			47,022
Total	$	22,041,996				$	25,697,936

At September 30, 2013 and December 31, 2012, the Bank’s consolidated obligation bonds outstanding included the following (in thousands, at par value):



	September 30, 2013		December 31, 2012
Non-callable bonds	$	17,013,335	$	21,088,230
Callable bonds	5,072,075		4,485,000
Total par value	$	22,085,410	$	25,573,230

The following table summarizes the Bank’s consolidated obligation bonds outstanding at September 30, 2013 and December 31, 2012, by the earlier of contractual maturity or next possible call date (in thousands, at par value):



Contractual Maturity or Next Call Date	September 30, 2013		December 31, 2012
Due in one year or less	$	18,055,610	$	13,813,500
Due after one year through two years	2,770,800		9,467,745
Due after two years through three years	732,000		1,459,985
Due after three years through four years	50,000		430,000
Due after four years through five years	397,000		—
Due after five years	80,000		402,000
Total par value	$	22,085,410	$	25,573,230

Discount Notes. At September 30, 2013 and December 31, 2012, the Bank’s consolidated obligation discount notes, all of which are due within one year, were as follows (dollars in thousands):



	Book Value		Par Value		Weighted Average Implied Interest Rate

September 30, 2013	$	6,513,829	$	6,515,000	0.08	%

December 31, 2012	$	6,984,378	$	6,986,856	0.15	%

None of the Bank's consolidated obligation discount notes were swapped at September 30, 2013 or December 31, 2012.