WHAT IS CDARS FLOATING-RATE FUNDING?
CDARS® Floating-Rate FundingSM is an effective way for banks to obtain large blocks of wholesale, variable-rate funding without collateralization requirements. CDARS Floating-Rate Funding enables institutions to maintain a target balance amount of funding at a floating rate over 1- to 7-year terms.
WHY DO BANKS CHOOSE CDARS FLOATING-RATE FUNDING?
With CDARS Floating-Rate Funding, banks can:
- Expand their options for wholesale funding
- Access stable, floating-rate funding for long terms
- Choose the term, from 1 to 7 years, available at an agreed upon floating rate, and enjoy long-term funding without collateralization
- Rest easy knowing there are no hidden fees — the index plus a fixed spread is the all-in cost
- Enjoy flexibility — choose to switch floating-rate funding for long- term, fixed-rate funding via a third party when the market environment is favorable
HOW DO CDARS FLOATING-RATE FUNDING ARRANGEMENTS WORK?
Banks that utilize CDARS are members of the Promontory Network. Floating- rate funding is provided through rolling, 4-week CDs issued by a member institution through CDARS® One-Way Buy® transactions. As a result, the institution receives stable funding at short-term rates over long terms.
A Floating-Rate Funding arrangement is simple to execute. Call the Treasury Desk to negotiate terms, and sign a two-page addendum to the CDARS-ICS Participating Institution Agreement. (New members sign the standard CDARS-ICS Participating Institution Agreement and the addendum.) The Treasury Desk will process orders and the related funding transactions.
CDARS Floating-Rate Funding is one of many Promontory Network funding solutions available to help banks access the cost-effective funding they need.
LEARN MORE ABOUT CDARS FLOATING-RATE FUNDING AND GET THE LATEST RATES
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Use of the CDARS service is subject to the terms, conditions, and disclosures set forth in the CDARS-ICS Participating Institution Agreement and the applicable Deposit Placement Agreement. Limits apply. CDARS and One-Way Buy are registered service marks, and Floating-Rate Funding is a service mark, of Promontory Interfinancial Network, LLC.