Freddie Mac 2009 Annual Report Download - page 265

Table 9.1 summarizes the balances and effective interest rates for debt securities, as well as subordinated borrowings.
Table 9.1 — Total Debt
Balance,
Net
(1)
Effective
Rate
(2)
Balance,
Net
(1)
Effective
Rate
(2)
2009 2008
December 31,
(dollars in millions)
Short-term debt:
Short-term debt securities . . ............................................... $238,171 0.28% $329,702 1.73%
Current portion of long-term debt . . . ........................................ 105,804 3.31 105,412 3.46
Short-term debt . . . . ..................................................... 343,975 1.21 435,114 2.15
Long-term debt:
Senior debt. . . . . . ..................................................... 435,931 3.43 403,402 4.70
Subordinated debt . ..................................................... 698 6.58 4,505 5.59
Long-term debt . . . . ..................................................... 436,629 3.44 407,907 4.71
Total debt . . . . . . . . ..................................................... $780,604 $843,021
(1) Represents par value, net of associated discounts, premiums and hedge-related basis adjustments, with $6.3 billion and $1.6 billion, respectively, of
short-term debt and $2.6 billion and $11.7 billion, respectively, of long-term debt that represent the fair value of debt securities with fair value option
elected at December 31, 2009 and 2008.
(2) Represents the weighted average effective rate that remains constant over the life of the instrument, which includes the amortization of discounts or
premiums and issuance costs. Also includes the amortization of hedge-related basis adjustments.
For 2009 and 2008, we recognized fair value gains (losses) of $(405) million and $406 million, respectively, on our
foreign-currency denominated debt, of which $(209) million and $710 million, respectively, are gains (losses) related to our
net foreign-currency translation. See “NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES” for additional
information regarding our adoption of the accounting standards related to the fair value option for financial assets and
financial liabilities.
Short-Term Debt
As indicated in Table 9.2, a majority of short-term debt (excluding current portion of long-term debt) consisted of
Reference Bills˛securities and discount notes, paying only principal at maturity. Reference Bills˛securities, discount notes
and medium-term notes are unsecured general corporate obligations. Certain medium-term notes that have original maturities
of one year or less are classified as short-term debt securities. Securities sold under agreements to repurchase are effectively
collateralized borrowing transactions where we sell securities with an agreement to repurchase such securities. These
agreements require the underlying securities to be delivered to the dealers who arranged the transactions. Federal funds
purchased are unsecuritized borrowings from commercial banks that are members of the Federal Reserve System. At both
December 31, 2009 and 2008, we had no balances in federal funds purchased and securities sold under agreements to
repurchase.
Table 9.2 provides additional information related to our short-term debt.
Table 9.2 — Short-Term Debt
Par Value
Balance,
Net
(1)
Effective
Rate
(2)
Par Value
Balance,
Net
(1)
Effective
Rate
(2)
2009 2008
December 31,
(dollars in millions)
Reference Bills˛securities and discount notes ................... $227,732 $227,611 0.26% $311,227 $310,026 1.67%
Medium-term notes . . . .................................. 10,561 10,560 0.69 19,675 19,676 2.61
Short-term debt securities . . . . ........................... 238,293 238,171 0.28 330,902 329,702 1.73
Current portion of long-term debt ........................... 105,729 105,804 3.31 105,420 105,412 3.46
Short-term debt . . . . .................................. $344,022 $343,975 1.21 $436,322 $435,114 2.15
(1) Represents par value, net of associated discounts, premiums and hedge-related basis adjustments.
(2) Represents the weighted average effective rate that remains constant over the life of the instrument, which includes the amortization of discounts or
premiums and issuance costs. The current portion of long-term debt includes the amortization of hedge-related basis adjustments.
262 Freddie Mac