Freddie Mac 2009 Annual Report Download - page 125

Agreement. The letter further stated that FHFA had presented other options for Treasury to consider, including allowing
Freddie Mac to pay senior preferred stock dividends by waiving the right to claim future tax benefits of the LIHTC
investments. However, after further consultation with Treasury and consistent with the terms of the Purchase Agreement, the
Acting Director informed us we may not sell or transfer the assets and that he sees no other disposition options. As a result,
we wrote down the carrying value of our LIHTC investments to zero as of December 31, 2009, resulting in a loss of
$3.4 billion. This write-down reduces our net worth at December 31, 2009 and, as such, increases the likelihood that we will
require additional draws from Treasury under the Purchase Agreement and, as a consequence, increases the likelihood that
our dividend obligation on the senior preferred stock will increase. See “NOTE 5: VARIABLE INTEREST ENTITIES” to
our consolidated financial statements for additional information.
Total Debt
Table 42 reconciles the par value of our debt, including short-term debt and long-term debt, to the amounts shown on
our consolidated balance sheets. See “LIQUIDITY AND CAPITAL RESOURCES” for further discussion of our debt
management activities.
Table 42 — Reconciliation of the Par Value to Total Debt, Net
2009 2008
December 31,
(in millions)
Total debt:
Par value ........................................................................... $805,073 $870,276
Unamortized balance of discounts and premiums
(1)
............................................... (24,907) (28,008)
Hedging-related and other basis adjustments
(2)
.................................................. 438 753
Total debt, net ......................................................................... $780,604 $843,021
(1) Primarily represents unamortized discounts on zero-coupon debt.
(2) Primarily represents deferrals related to debt instruments that were in hedge accounting relationships and changes in the fair value attributable to
instrument-specific credit risk related to foreign-currency-denominated debt.
Table 43 summarizes our short-term debt.
Table 43 — Short-Term Debt
2009
Balance, Net
(1)
Weighted
Average
Effective Rate
(2)
Balance, Net
(3)
Weighted
Average
Effective Rate
(4)
Maximum
Balance, Net
Outstanding at Any
Month End
December 31,
Average Outstanding
During the Year
(dollars in millions)
Reference Bills˛securities and discount notes ......... $227,611 0.26% $261,020 0.70% $340,307
Medium-term notes . . . . ....................... 10,560 0.69 19,372 1.10 34,737
Federal funds purchased and securities sold under
agreements to repurchase . . . .................. — — 33 0.29 —
Subtotal . . ............................... 238,171 0.28
Current portion of long-term debt ................. 105,804 3.31
Short-term debt ............................ $343,975 1.21
2008
Balance, Net
(1)
Weighted
Average
Effective Rate
(2)
Balance, Net
(3)
Weighted
Average
Effective Rate
(4)
Maximum
Balance, Net
Outstanding at Any
Month End
December 31,
Average Outstanding
During the Year
(dollars in millions)
Reference Bills˛securities and discount notes ......... $310,026 1.67% $231,361 2.65% $310,026
Medium-term notes . . . . ....................... 19,676 2.61 11,758 2.74 19,676
Federal funds purchased and securities sold under
agreements to repurchase . . . .................. — — 519 2.86 3,500
Subtotal . . ............................... 329,702 1.73
Current portion of long-term debt ................. 105,412 3.46
Short-term debt ............................ $435,114 2.15
122 Freddie Mac