Freddie Mac 2010 Annual Report Download - page 116

Cash and Other Investments Counterparties
We are exposed to institutional credit risk arising from the potential insolvency or non-performance of counterparties of
non-mortgage-related investment agreements and cash equivalent transactions, including those entered into on behalf of our
securitization trusts. These financial instruments are investment grade at the time of purchase and primarily short-term in
nature, which mitigates institutional credit risk for these instruments. To minimize counterparty risk of our on-balance-sheet
assets, we access government programs and initiatives designed to support the economic environment in general and the
credit and mortgage markets in particular. For example, we have adjusted our policies and exposure measurement
methodology to reflect the FDIC’s added insurance coverage on principal and interest deposits up to $250,000. We also
manage significant cash flow for the securitization trusts that are created in connection with our issuance of Freddie Mac
mortgage-related securities. See “BUSINESS — Our Business — Our Business Segments —Single-Family Guarantee
Segment — Securitization Activities” and “NOTE 19: CONCENTRATION OF CREDIT AND OTHER RISKS” for further
information on these transactions associated with securitization trusts.
Table 40 summarizes our counterparty credit exposure for cash equivalents, federal funds sold and securities purchased
under agreements to resell that are presented both on our consolidated balance sheets as well as those off-balance sheet. As
of December 31, 2009, cash and other investment transactions that we entered into on behalf of our securitization trusts
represented off-balance sheet exposure.
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