Freddie Mac 2015 Annual Report Download - page 259

Financial Statements Notes to the Consolidated Financial Statements | Note 6
Freddie Mac 2015 Form 10-K 257
NON-CASH INVESTING AND FINANCING ACTIVITIES
From time to time, we contribute PCs and Giant PCs held in our investments portfolio to non-consolidated
REMIC trusts in exchange for beneficial interests in those same REMIC trusts. We account for this type of
transaction as the acquisition of investment securities and the issuance of debt securities of consolidated
trusts. During 2015 and 2014, we received investment securities as consideration for the issuance of debt
securities of consolidated trusts of $0.3 billion and $1.8 billion, respectively, as a result of these
transactions.
In addition, from time to time, we may recombine all of the outstanding beneficial interests in a REMIC
trust to effectively recreate the original Giant PC trust. In certain cases, we may receive only beneficial
interests in the Giant PC trust as proceeds for our contribution of the collateral. Because the beneficial
interest issued by the Giant PC is substantially the same as the PCs that ultimately collateralized the
trust, we account for our interest in the Giant PC as an extinguishment of the outstanding debt securities
of the underlying PC trusts. As a result, we account for this type of transaction as the transfer of
investment securities in exchange for the extinguishment of debt securities of consolidated trusts. During
2015 and 2014, we extinguished debt securities of consolidated trusts as consideration for the transfer of
investment securities of $0.5 billion and $0 billion, respectively, as a result of these transactions.