8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 27, 2019

Federal Home Loan Bank of Dallas

__________________________________________

(Exact name of registrant as specified in its charter)

Federally Chartered Corporation	000-51405	71-6013989
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
8500 Freeport Parkway South, Suite 600, Irving, Texas		75063-2547
____________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 214-441-8500

Not Applicable

______________________________________________

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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Item 8.01 Other Events

On September 27, 2019, the Federal Housing Finance Agency (“Finance Agency”) issued a supervisory letter to the Federal Home Loan Bank of Dallas (“Bank”) and the other 10 Federal Home Loan Banks (collectively, the “FHLBanks”) relating to their preparations for the potential phase-out of the London Interbank Offered Rate (“LIBOR”) after December 31, 2021. Under the supervisory letter, with limited exceptions, the FHLBanks should, by December 31, 2019, no longer purchase LIBOR-indexed investments which mature after December 31, 2021 and should, by March 31, 2020, no longer issue, make, purchase or otherwise enter into financial liabilities, derivatives or other assets that reference LIBOR and which mature after December 31, 2021. The foregoing includes, among other financial instruments, LIBOR-indexed advances and other structured advance products for which a LIBOR-indexed derivative is used to hedge the advance. A copy of the Finance Agency’s supervisory letter is attached to this Current Report on Form 8-K as Exhibit 99.1.

On September 27, 2019, the Bank notified its stockholders (by way of a bulletin) that the Finance Agency had issued the supervisory letter referred to in the preceding paragraph. A copy of the stockholder bulletin is attached to this Current Report on Form 8-K as Exhibit 99.2.

The guidance provided by the supervisory letter could have an effect on some of the structured advance products offered by the Bank after March 31, 2020 which, if either no longer offered or offered on less favorable terms, could cause a decline in the Bank’s total advances and, in turn, the Bank’s future profitability. Similarly, the Bank’s inability to purchase LIBOR-indexed investments and fixed rate investments that are hedged with LIBOR-indexed derivatives could negatively affect the Bank’s future profitability.

This Current Report on Form 8-K contains forward-looking statements that reflect current beliefs and expectations of the Bank about its future performance, prospects and opportunities. These statements are identified by the use of forward-looking terminology (e.g., “could”). The Bank cautions that forward-looking statements involve risks or uncertainties that could cause the Bank’s actual future results to differ materially from those expressed or implied in these forward-looking statements, or could affect the extent to which a particular projection or prediction is realized. As a result, undue reliance should not be placed on such statements.

These risks and uncertainties include, without limitation, evolving economic and market conditions, market developments with respect to the identification of alternative reference rates, regulatory changes, and the impact of competitive business forces. For a more detailed discussion of the risk factors applicable to the Bank, see Item 1A. Risk Factors in the Bank’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission on March 25, 2019. The Bank undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or any other reason.

Item 9.01 Financial Statements and Exhibits.

Exhibits

99.1 FHFA Supervisory Letter dated September 27, 2019.

99.2 Bulletin No. 2019-22 (Supervisory Letter on LIBOR-Linked Financial Transactions) dated September 27, 2019.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Federal Home Loan Bank of Dallas
September 27, 2019	By:	/s/ Tom Lewis
		Name: Tom Lewis
		Title: Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	FHFA Supervisory Letter dated September 27, 2019.
99.2	Bulletin No. 2019-22 (Supervisory Letter on LIBOR-Linked Financial Transactions) dated September 27, 2019.

EX-99.1

Exhibit 99.1

Federal Housing Finance Agency

Constitution Center

400 7th Street, S.W.

Washington, D.C. 20219

Telephone: (202) 649-3800

Facsimile: (202) 649-1071

www.fhfa.gov

To: Federal Home Loan Bank Presidents and Chief Executive Officers President and Chief Executive Officer, Office of Finance

From: Andre D. Galeano, Deputy Director

Division of Federal Home Loan Bank Regulation

Subject:Supervisory Letter - Planning for LIBOR Phase-Out

Date:September 27, 2019

To ensure that the Federal Home Loan Banks (FHLBanks or Banks) will be able to identify and prudently manage the risks associated with the termination of LIBOR in a safe and sound manner, the FHLBanks should, by March 31, 2020, no longer enter into new financial assets, liabilities, and derivatives that reference LIBOR and mature after December 31, 2021 for all product types except investments. For investments, the FHLBanks should, by December 31, 2019, stop purchasing investments that reference LIBOR and mature after December 31, 2021. The above phase-out dates do not apply to collateral accepted by the FHLBanks.

Each Bank should report to the Division of FHLBank Regulation (DBR) any new LIBOR-based transactions maturing after December 31, 2021 into which it enters. This reporting should be done on a month-end basis beginning with October 2019. Each Bank should encourage its members to distinguish collateral linked to LIBOR with maturies beyond 2021 by updating collateral certification reporting requirements by March 31, 2020.

Recognizing that there may be LIBOR-indexed, long-dated products that serve a compelling mission, risk-mitigating, and/or hedging purpose (e.g., swaptions) that do not currently have readily available alternatives, DBR requests the FHLBanks jointly submit a single list of LIBOR­ indexed products maturing after 2021 that they would like to continue to use after March 31, 2020. This list should not include derivatives FHLBanks acquire to offset market risks from structured advances products. For each product submitted to DBR, the Banks should include a statement

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explaining how they will manage the risks the products present and how the products serve the mission of the FHLBanks.

If you have any questions, please contact your examiner-in-charge, Associate Director of Examinations, or Daniel E. Coates, Senior Associate Director and Chairman of the FHFA's Reference Rate Transition Steering Committee at Daniel.Coates@fhfa.gov or 202-649-3280.

EX-99.2

Exhibit 99.2

Bulletin No.: 2019-22

September 27, 2019

TO: MEMBERS

SUBJECT: Supervisory Letter on LIBOR-Linked Financial Transactions

The financial markets are preparing for the possible phase-out of the London Interbank Offered Rate (LIBOR) by the end of 2021.

As part of this transition, the Federal Housing Finance Agency (FHFA) recently issued a supervisory letter to all Federal Home Loan Banks (FHLBanks). The FHFA, which regulates the FHLBanks, is requiring that by March 31, 2020, the FHLBanks cease entering into most new LIBOR referenced instruments with maturities beyond December 31, 2021. This change may impact certain Federal Home Loan Bank of Dallas (Bank) products with a LIBOR component, including:

• Structured advance products

• LIBOR-indexed derivatives

The FHFA also provided guidance to the FHLBanks regarding member collateral. In 2019, the Bank included questions regarding its members’ plans to transition loans that are indexed to LIBOR in the “2019 FHLB Onsite Collateral Verification Questionnaire.” At FHFA’s request, starting in 2020, the Bank will require members to identify loans linked to LIBOR that are pledged as collateral. This will ensure that the Bank can distinguish LIBOR-linked collateral maturing past December 31, 2021.

The full letter from the FHFA is available for your reference at https://www.fhfa.gov/Media/PublicAffairs/PublicAffairsDocuments/Supervisory-Letter_Planning-for-LIBOR-Phase-Out.pdf

The 11 FHLBanks are participating in industry-wide efforts to facilitate an orderly transition to an alternative reference rate(s). Each FHLBank has developed and is executing a multi-year plan to reduce its LIBOR exposures over time.

As we prepare for this transition, we also want to ensure that you, our members, are as prepared as possible. Resources regarding the LIBOR transition that may be helpful are available at fhlb.com/sofr.

We will provide you with ongoing updates as new information and resources become available. If you have questions regarding this communication or would like more details on the LIBOR transition, please contact Member Services at 844.FHL.BANK (844.345.2265).

Sincerely,

Sanjay K. Bhasin

President and Chief Executive Officer