Funding Agreements
A structured insurance product providing bilateral, fixed-term funding to institutional counterparties through privately negotiated credit agreements.
A Funding Agreement-Backed Loan (FABL) involves a life insurer issuing a funding agreement to a special purpose vehicle, which then converts it into a loan.
Unlike a Funding Agreement-Backed Note (FABN), which is sold into the capital markets as a 144A security, a FABL is a bilateral transaction with no public issuance and typically no collateral.
This structure appeals to counterparties that prefer loan documentation over note or other formats, and it allows insurers to maintain policyholder treatment while offering fixed terms and streamlined execution.
FABLs offer insurers a direct, bilateral funding option that avoids public issuance and preserves policyholder treatment. Their simplicity and speed of execution make them well-suited for targeted, short- to medium-term financing.
For institutional counterparties, FABLs provide fixed terms, clean documentation, and a loan format that aligns with internal systems and regulatory preferences. This structure appeals to those seeking predictable exposure without the complexity of securities-based transactions.