Fannie Mae 2006 Annual Report Download - page 280

Additionally, we record a secured borrowing, to the extent of proceeds received, upon the transfer of financial
assets from the consolidated balance sheets that does not qualify as a sale. Long-term debt from these
transactions in the consolidated balance sheets as of December 31, 2006 and 2005 was $1.4 billion and
$1.7 billion, respectively.
Characteristics of Debt
As of December 31, 2006 and 2005, the face amount of our debt securities was $773.4 billion and
$766.3 billion, respectively. As of December 31, 2006 and 2005, we had zero-coupon debt with a face amount
of $182.5 billion and $188.1 billion, respectively, which had an effective interest rate of 5.3% and 4.2%,
respectively.
We issue callable debt instruments to manage the duration and prepayment risk of expected cash flows of the
mortgage assets we own. Our outstanding debt as of December 31, 2006 included $201.5 billion of callable
debt that could be redeemed in whole or in part at our option any time on or after a specified date.
The table below displays the amount of our long-term debt as of December 31, 2006 by year of maturity for
each of the years 2007-2011 and thereafter. The first column assumes that we pay off this debt at maturity,
while the second column assumes that we redeem our callable debt at the next available call date.
Long-Term Debt by
Year of Maturity
Assuming Callable Debt
Redeemed at Next
Available Call Date
(Dollars in millions)
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,560 $284,207
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,759 100,829
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,291 51,495
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51,078 38,325
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54,430 34,122
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,355 85,495
Debt from consolidations
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,763 6,763
Total
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $601,236 $601,236
(1)
Contractual maturity of debt from consolidations is not a reliable indicator of expected maturity because borrowers of
the underlying loans generally have the right to prepay their obligations at any time.
(2)
Reported amount includes a net premium and cost basis adjustments of $11.9 billion.
The table below displays the amount of our debt called and repurchased and the associated weighted average
interest rates, as well as losses from these debt extinguishments, for the years ended December 31, 2006, 2005
and 2004.
2006 2005 2004
For the Year Ended December 31,
(Dollars in millions)
Debt called. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,137 $27,958 $155,569
Weighted average interest rate of debt called . . . . . . . . . . . . . . . . . . . . . . . . 5.9% 5.1% 2.8%
Debt repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,515 $22,876 $ 4,291
Weighted average interest rate of debt repurchased . . . . . . . . . . . . . . . . . . . . 4.7% 4.1% 3.5%
Debt extinguishment gains (losses), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 201 $ (68) $ (152)
F-49
FANNIE MAE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)