Freddie Mac 2010 Annual Report Download - page 152

debt. Our short-term debt was 28% of outstanding other debt on December 31, 2010, as compared to 31% and 30% at
December 31, 2009 and September 30, 2010, respectively.
Because of the debt limit under the Purchase Agreement, we may be restricted in the amount of debt we are allowed to
issue to fund our operations. Under the Purchase Agreement, without the prior written consent of Treasury, we may not incur
indebtedness that would result in the par value of our aggregate indebtedness exceeding 120% of the amount of mortgage
assets we are allowed to own on December 31 of the immediately preceding calendar year. Our debt cap under the Purchase
Agreement was $1.08 trillion in 2010 and will be $972 billion in 2011. We also cannot become liable for any subordinated
indebtedness without the prior written consent of Treasury.
As of December 31, 2010, we estimate that the par value of our aggregate indebtedness for purposes of the debt limit
imposed by the Purchase Agreement totaled $728.2 billion, which was approximately $351.8 billion below the applicable
limit of $1.08 trillion. Under the Purchase Agreement, the amount of our “indebtedness” is determined based on par value,
without giving effect to any change in the accounting standards related to transfers of financial assets and consolidation of
VIEs or any similar accounting standard. Accordingly, our aggregate indebtedness for this purpose excludes debt securities of
consolidated trusts held by third parties. We disclose the amount of our indebtedness on this basis monthly under the caption
“Other Debt Activities — Total Debt Outstanding” in our Monthly Volume Summary reports, which are available on our
website and in current reports on Form 8-K we file with the SEC.
Other Debt Issuance Activities
Table 60 summarizes the par value of other debt securities we issued, based on settlement dates, during 2010 and 2009.
Table 60 — Other Debt Security Issuances by Product, at Par Value
(1)
2010 2009
Year Ended December 31,
(in millions)
Other short-term debt:
Reference Bills˛securities and discount notes .................................................. $481,853 $590,697
Medium-term notes — callable ............................................................. 1,500 7,780
Medium-term notes — non-callable
(2)
........................................................ 1,364 11,886
Total other short-term debt .............................................................. 484,717 610,363
Other long-term debt:
Medium-term notes — callable
(3)
........................................................... 219,847 193,580
Medium-term notes — non-callable . . ........................................................ 74,487 99,099
U.S. dollar Reference Notes˛securities — non-callable . . .......................................... 36,500 56,000
Total other long-term debt .............................................................. 330,834 348,679
Total other debt issued . . . . . ............................................................... $815,551 $959,042
(1) Excludes federal funds purchased and securities sold under agreements to repurchase and lines of credit. Also excludes debt securities of consolidated
trusts held by third parties.
(2) Includes $1.4 billion and $536 million of medium-term notes — non-callable issued for the years ended December 31, 2010 and 2009, respectively,
which were accounted for as debt exchanges.
(3) Includes $0 million and $25 million of medium-term notes — callable issued for the years ended December 31, 2010 and 2009, respectively, which were
accounted for as debt exchanges.
Other 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.
Other 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.
149 Freddie Mac