The Federal Home Loan Bank system, the series of government-chartered cooperatives owned by U.S. financial companies, cut its outstanding long-term debt to the lowest since January 2004 as banks curb lending and tap alternative funding sources. The system’s bonds dropped by almost $30 billion last month to $591.8 billion, down from a record $890.7 billion in October 2008, according to data e-mailed today by the system’s Reston, Virginia-based finance office. Total debt, including notes due in less than a year, fell $7.4 billion to $798.6 billion, the least since March 2004, from a high of $1.33 trillion in 2008. The Federal Home Loan Bank system was once the largest U.S. borrower after the federal government, before shrinking below the size of Fannie Mae, the U.S.-supported mortgage-finance company. Prior to tumbling, the collective borrowing of the 12 regional FHLBs soared during the worst financial crisis since the Great Depression as their owners sought funding.