Fannie Mae 2002 Annual Report Download - page 48

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46 FANNIE MAE 2002 ANNUAL REPORT
TABLE 14: SHORT-TERM AND LONG-TERM
DEBT ACTIVITY
Dollars in millions 2002 2001 2000
Issued during the year:
Short-term1:
Amount . . . . . . . . . . . . . . $1,635,919 $1,756,691 $1,143,131
Average cost . . . . . . . . . . 1.67% 3.69% 6.27%
Long-term1:
Amount . . . . . . . . . . . . . . $238,467 $249,352 $ 110,215
Average cost . . . . . . . . . . 3.78% 4.83% 6.92%
Total issued:
Amount . . . . . . . . . . . . . . $1,874,386 $2,006,043 $1,253,346
Average cost . . . . . . . . . . 2.21% 3.97% 6.34%
Repaid during the year:
Short-term1:
Amount . . . . . . . . . . . . . . $1,620,644 $1,691,240 $1,106,956
Average cost . . . . . . . . . . 1.84% 4.22% 6.15%
Long-term1:
Amount . . . . . . . . . . . . . . $175,809 $196,610 $ 50,335
Average cost . . . . . . . . . . 4.85% 6.03% 6.33%
Total repaid:
Amount . . . . . . . . . . . . . . $1,796,453 $1,887,850 $1,157,291
Average cost . . . . . . . . . . 2.34% 4.47% 6.14%
Outstanding at year-end:
Due within one year:
Net amount . . . . . . . . . . $382,412 $343,492 $ 280,322
Cost2 . . . . . . . . . . . . . . . . 1.95% 2.81% 6.40%
Average term in months4 . 545
Due after one year:
Net amount . . . . . . . . . . . $468,570 $419,975 $ 362,360
Cost2 . . . . . . . . . . . . . . . . 5.14% 5.52% 6.46%
Average term in months4 . 67 70 76
Total debt:
Net amount . . . . . . . . . . . $850,982 $763,467 $ 642,682
Cost3 . . . . . . . . . . . . . . . . 4.81% 5.49% 6.47%
Average term in months4 . 58 66 69
1“Short-term” refers to the face amount of debt issued with an original term of one year or less.
“Long-term” refers to the face amount of debt issued with an original term greater than one year.
2Cost includes the effects of currency, debt, and amortization of premiums, discounts, issuance costs, and
hedging results.
3Cost includes the effects of currency, debt, and interest rate swaps and amortization of premiums,
discounts, issuance costs, and hedging results.
4Average term includes the effects of interest rate swaps.
We took advantage of opportunities to repurchase $8 billion
of debt in 2002 and $9 billion of debt in 2001 that was trading
at historically wide spreads to other fixed-income securities.
In addition, we continued to call significant levels of debt in
2002 as a result of the sharp decline in interest rates that
began in 2001. We called $174 billion in debt and interest
rate swaps in 2002 and $173 billion in 2001. We reissued
much of this debt with short-term maturities in anticipation
of the expected increase in mortgage liquidations. Interest
rate swaps lengthened the weighted-average final maturity of
our outstanding debt by 20 months at December 31, 2002,
down from 26 months at December 31, 2001. Table 15 shows
our adjusted effective short- and long-term debt at the end of
2002, 2001, and 2000.
TABLE 15: EFFECTIVE SHORT-TERM AND
LONG-TERM DEBT
Dollars in millions 2002 2001 2000
Outstanding at year-end:
Short-term1:
Net amount . . . . . . . . . . . . . $192,702 $138,986 $103,852
Cost . . . . . . . . . . . . . . . . . . . 1.52% 2.75% 6.13%
Weighted-average
maturity (in months) . . . . . 355
Percent of total debt
outstanding . . . . . . . . . . . 23% 18% 16%
Long-term2:
Net amount . . . . . . . . . . . . . $651,827 $627,196 $543,964
Cost . . . . . . . . . . . . . . . . . . . 5.48% 5.96% 6.48%
Weighted-average
maturity (in months) . . . . . 75 78 79
Percent of total debt
outstanding . . . . . . . . . . . 77% 82% 84%
Total:
Net amount3 . . . . . . . . . . . . $844,529 $766,182 $647,816
Cost . . . . . . . . . . . . . . . . . . . 4.81% 5.49% 6.47%
Weighted-average
maturity (in months) . . . . . 58 66 69
1Represents the redemption value of short-term debt adjusted to include the effect of derivative
instruments that replicate short-term, variable-rate debt securities and exclude short-term debt securities
that have been economically converted into long-term debt funding through interest rate swaps.
2Represents the redemption value of long-term debt adjusted to include the effect of short-to-long interest
rate swaps that economically convert short-term debt securities into long-term debt securities and exclude
long-term debt securities that have been economically converted into short-term funding through interest
rate swaps.
3Represents the redemption value of outstanding debt at year-end. Excludes the effect of amortization of
premiums, discounts, issuance costs, and hedging results.
Our asset-liability management strategies, combined with
favorable market conditions for borrowing, had the following
effect on the debt portfolio:
•The average cost of outstanding debt during 2002
decreased to 5.38 percent from 6.00 percent in 2001.
At December 31, 2002 and 2001, the cost of debt
outstanding was 4.81 percent and 5.49 percent,
respectively.
•Effective long-term debt, which takes into
consideration the effect of derivative instruments on
the maturity of long- and short-term debt, decreased
to 77 percent of total debt outstanding at December
31, 2002 from 82 percent at year-end 2001.