The Federal Home Loan Banks, the government-chartered cooperatives owned by US financial companies, are selling $500m of securities linked to mortgage-bond prepayments, the system’s first offering of such debt in almost two years. The amortizing prepayment-linked securities, or APLS, carry 2.6% coupons and are being sold this month by RBS Securities. They will mature no later than April 2015, though are similar to collateralized mortgage obligations in that the timing of payments to investors will vary based on loan refinancing, home sales and other sources of prepayments.
