Letters of Credit
Our Standby Letters of Credit (LOCs) provide Seattle Bank members with an efficient
and low-cost way to secure contractual agreements with third parties and guarantee
their financial strength to perform as agreed in a contract.
Seattle Bank Standby LOCs may be issued or confirmed to facilitate residential housing
finance, support affordable housing and economic development initiatives, assist
with asset/liability management, and provide liquidity or other funding.
Our Standby LOCs have been used to:
- Facilitate the purchase of (or commitment to purchase) mortgage loans
- Collateralize public deposits and interest rate swaps
- Support the issuance of commercial paper and medium-term notes
- Support other transactions that promote affordable housing or economic development,
including projects funded with advances from the
Investment Program (CIP) and Economic Development Fund (EDF).
Terms are individually structured to meet your needs. Our Standby LOCs can be issued
for up to 10 years for most commercial purposes—or up to 20 years when used
to finance housing or to support an interest-rate swap. Our fees are competitive,
and you'll benefit from our excellent credit rating with lower transaction costs.
Borrowers must pledge sufficient collateral to support their LOCs.
Special Considerations for Community Investment
Standby LOCs issued to support housing or economic development may be secured on
a case-by-case basis with the following collateral:
- Investment grade obligations of state and local governments
- Secured or federally guaranteed loans to small businesses or securities representing
interests in such loans
- Second mortgage loans and commercial real estate loans
Borrowers must provide documentation to validate that the letter of credit is supporting
an affordable housing or economic development initiative.
To learn more about our Standby Letters of Credit and how they can work for you: