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LC Structure, Usage, Benefits
AGENDA
Overview
Introduction of Presenters
Doug Iverson Denise Yvette Barkdull
Senior VP Partner
Director of Marketing, FHLBI Ice Miller
Thomas Peterson
Partner
Ice Miller
Funding
• A pledge drive has raised $3.7 million to date.
Goal is $4 million.
• FHLBI letters of credit to support bond issuance
> First Bank of Berne - $4.8 million
> Bank of Geneva - $2.2 million
• Investment bank - Lancaster Pollard & Co.,
Columbus, OH
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Standby Letters of Credit
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Standby Letters of Credit
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Standby Letters of Credit
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Standby Letters of Credit
Standard Fees
• Standby, Confirming, and Direct Pay:
37.5 BPS annually, beginning with settlement date
• Community Investment Program (CICA):
20 BPS annually, beginning with settlement date
• Transaction Fee of $50 for all draws
• If FHLBI uses outside counsel, fee to be paid by member
• Early termination fee of up to $5,000 may apply
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Standby Letters of Credit
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Standby Letters of Credit
Other Specifications
• Standby LCs limited to maximum term of 20 years
• Member must collateralize total amount of Standby LCs
and includes Standby LCs in calculating a member’s
capital stock requirement.
The FHLBI is not a financial, investment, or tax advisor and does not make any
representations as to such regarding the use of Standby LC. It is the member’s
sole responsibility to research the legal ramifications of using FHLBI Standby LC
and the effect it may have on the taxable status of a bond issuance.
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Tax-exempt Bonds & How They Work
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Role of the Federal Home Loan Bank
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Role of the Federal Home Loan Bank
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Tax-exempt Bonds & How They Work
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Tax-exempt Bonds & How They Work
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Tax-exempt Bonds & How They Work
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Tax-exempt Bonds & How They Work
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Tax-exempt Bonds & How They Work
Denise Barkdull
denise.barkdull@icemiller.com
317-236-5803
Thomas Peterson
thomas.peterson@icemiller.com
317-236-2494
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LC Benefits, & Observations
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LC Benefits, & Observations
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LC Benefits, & Observations
General Observations
• Members lending limit restrictions may be overcome
by including multiple members in deal
• If multiple members involved, one “lead” member is
key to structuring efficiencies
• AAA-rated FHLBank LC is trading extremely well in
today’s financial markets; enhanced interest in
“flight to quality” financial environment
• Collateral posting requirements appear to be primary
deterrent to members using LCs
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Biographies
Undergraduate School:
Bachelor of Business Administration in Finance, Boise State University, Graduated in 1994
Graduate School:
Master of Business Administration, Indiana University Kelley School of Business,
Graduated in 1997
Law School:
Indiana University School of Law – Bloomington, Graduated in 1997
Admitted to Practice:
Indiana
Mini Biography:
Denise Barkdull assists state and local governments with taxable and tax exempt
financings for direct governmental purposes, as well as economic development within
their region. Ms. Barkdull provides counsel for, among other things, airports, solid
waste disposal facilities, single family and multi-family housing, municipal gas utilities
and manufacturing facilities. 22
Biographies
Undergraduate School:
University Diploma, with high honors, Darwin College, University of Kent,
Canterbury,England, Graduated in 1982
Law School:
Duke University, Graduated in 1986
Mini Biography:
Thomas Peterson has served as bond counsel to state and local governments
for over 22 years. Mr. Peterson has also served as special counsel to the Federal Home
Loan Bank of Indianapolis in the development of their Letter of Credit program.
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Biographies
Since joining Lancaster Pollard in 2001, Mr. Kennedy has devoted 100% of
his efforts to providing health care organizations with financial advisory
and capital funding solutions. He has been instrumental in bringing to
market a variety of financing structures totaling in excess of $500 million
and was named Lancaster Pollard’s National Healthcare Banker of the
Year in 2007. Prior to joining Lancaster Pollard, Mr. Kennedy worked for
United States Senator Richard G. Lugar (Indiana) in Washington D.C.
Mr. Kennedy earned his MBA from the Fisher College of Business at The
Ohio State University in Columbus, Ohio. He received bachelor degrees
(magna cum laude) in economics and political science and a certificate in
organizational studies from Denison University in Granville, Ohio. He
holds a General Securities Representative license, Series 7, and is a
frequent speaker on capital funding for community health care providers.
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