FHLBanks licenses the Principia System

The Office of Finance is the debt issuing facility for the US-wide network of FHLBanks, liaising with securities dealers to fund FHLBank activities. Principia offers the facility a sophisticated debt analysis solution, with the powerful analytics necessary to support deal capture, pricing and risk measurement and relative value analysis for a wide variety of agency bonds and derivatives. Using Principias valuation platform, the Office of Finance will be able to provide the FHLBanks with consistent and timely data comparing various debt structures, as well as a historical database. A number of the regional FHLBanks are currently using the system to manage their fixed income and derivatives business processing. The Principia System offers advanced modeling and pricing capabilities, which greatly enhance the accuracy of pricing by incorporating subtleties such as LIBOR basis, cross-currency basis, and supply/demand skewing of volatilities. The systems risk management tools are comprehensive, allowing users to calculate and monitor risk both on individual transactions and across entire portfolios. Valuations are performed using consistent methodologies on a common platform to preserve integrity throughout the entire trade lifecycle, from trade inception through to regulatory reporting and FAS-compliant accounting.