Freddie Mac 2009 Annual Report Download - page 133

As of December 31, 2009, we estimate that the par value of our aggregate indebtedness totaled $805.1 billion, which
was approximately $274.9 billion below the applicable limit of $1.08 trillion. Our aggregate indebtedness calculation, which
has not been confirmed by Treasury, includes the combined balance of our senior and subordinated debt. Because of the debt
limit, we may be restricted in the amount of debt we are allowed to issue to fund our operations.
Debt Issuance Activities
Table 46 summarizes the par value of the debt securities we issued, based on settlement dates, during 2009 and 2008.
Table 46 — Debt Security Issuances by Product, at Par Value
(1)
2009 2008
Year Ended December 31,
(in millions)
Short-term debt:
Reference Bills˛securities and discount notes . ................................................ $590,697 $ 812,539
Medium-term notes — callable ........................................................... 7,780 13,237
Medium-term notes — non-callable
(2)
....................................................... 11,886 12,093
Total short-term debt . . . ............................................................. 610,363 837,869
Long-term debt:
Medium-term notes — callable
(3)
.......................................................... 193,580 153,318
Medium-term notes — non-callable . ....................................................... 99,099 41,995
U.S. dollar Reference Notes˛securities — non-callable . .......................................... 56,000 49,000
Total long-term debt ................................................................. 348,679 244,313
Total debt issued . . .................................................................... $959,042 $1,082,182
(1) Excludes federal funds purchased and securities sold under agreements to repurchase and lines of credit.
(2) Includes $536 million and $3.8 billion of medium-term notes — non-callable issued for the years ended December 31, 2009 and 2008, respectively,
which were accounted for as debt exchanges.
(3) Includes $25 million and $14.3 billion of medium-term notes — callable issued for the years ended December 31, 2009 and 2008, respectively, which
were accounted for as debt exchanges.
Short-Term Debt
We fund our operating cash needs, in part, by issuing Reference Bills˛securities and other discount notes, which are
short-term instruments with maturities of one year or less that are sold on a discounted basis, paying only principal at
maturity. Our Reference Bills˛securities program consists of large issues of short-term debt that we auction to dealers on a
regular schedule. We issue discount notes with maturities ranging from one day to one year in response to investor demand
and our cash needs. Short-term debt also includes certain medium-term notes that have original maturities of one year or
less.
Long-Term Debt
We issue debt with maturities greater than one year primarily through our medium-term notes program and our
Reference Notes˛securities program.
Medium-term Notes
We issue a variety of fixed- and variable-rate medium-term notes, including callable and non-callable fixed-rate
securities, zero-coupon securities and variable-rate securities, with various maturities ranging up to 30 years. Medium-term
notes with original maturities of one year or less are classified as short-term debt. Medium-term notes typically contain call
provisions, effective as early as three months or as long as ten years after the securities are issued.
Reference Notes˛Securities
Reference Notes˛securities are regularly issued, U.S. dollar denominated, non-callable fixed-rate securities, which we
generally issue with original maturities ranging from two through ten years. We have also issued AReference Notes˛
securities denominated in Euros, which remain outstanding, but did not issue any such securities in 2009 or 2008. We hedge
our exposure to changes in foreign-currency exchange rates by entering into swap transactions that convert foreign-currency
denominated obligations to U.S. dollar-denominated obligations. See “QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK — Interest-Rate Risk and Other Market Risks — Sources of Interest-Rate Risk
and Other Market Risks” for more information.
The investor base for our debt is predominantly institutional and, more recently, the U.S. government. However, we also
conduct regular offerings of FreddieNotes˛securities, a medium-term notes program designed to meet the investment needs
of retail investors.
Subordinated Debt
During 2009 and 2008, we did not issue any Freddie SUBS»securities; however, as noted below, we did make a tender
offer in July 2009 for these securities. Following completion of the tender offer, the balance of our subordinated debt
130 Freddie Mac