Fannie Mae 2007 Annual Report Download - page 240

Refer to “Note 1, Summary of Significant Accounting Policies,” for information regarding our servicing
income in the form of “Trust management income” beginning in November 2006.
9. Short-term Borrowings and Long-term Debt
We obtain the funds to finance our mortgage purchases and other business activities primarily by selling debt
securities in the domestic and international capital markets. We issue a variety of debt securities to fulfill our
ongoing funding needs.
Short-term Borrowings
Our short-term borrowings, borrowings with an original contractual maturity of one year or less, consist of
both “Federal funds purchased and securities sold under agreements to repurchase” and “Short-term debt” in
the consolidated balance sheets. The following table displays our outstanding short-term borrowings and
weighted average interest rates as of December 31, 2007 and 2006.
Outstanding
Weighted
Average
Interest
Rate
(1)
Outstanding
Weighted
Average
Interest
Rate
(1)
2007 2006
As of December 31,
(Dollars in millions)
Federal funds purchased and securities sold under
agreements to repurchase. . . . . . . . . . . . . . . . . . . . . . . $ 869 3.48% $ 700 5.36%
Fixed short-term debt:
Discount notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $233,258 4.45% $158,785 5.16%
Foreign exchange discount notes . . . . . . . . . . . . . . . . . 301 4.28 194 4.09
Other short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . 601 4.37 5,707 5.24
Total fixed short-term debt . . . . . . . . . . . . . . . . . . . . 234,160 4.45 164,686 5.16
Debt from consolidations . . . . . . . . . . . . . . . . . . . . . . . . — — 1,124 5.32
Total short-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . $234,160 4.45% $165,810 5.16%
(1)
Includes discounts, premiums and other cost basis adjustments.
Our federal funds purchased and securities sold under agreements to repurchase represent agreements to
repurchase securities from banks with excess reserves on a particular day for a specified price, with the
repayment generally occurring on the following day. Our short-term debt includes discount notes and foreign
exchange discount notes, as well as other short-term debt. Our discount notes are unsecured general
obligations and have maturities ranging from overnight to 360 days from the date of issuance.
Additionally, we issue foreign exchange discount notes in the Euro money market enabling investors to hold
short-term investments in different currencies. We have the ability to issue foreign exchange discount notes in
all tradable currencies in maturities from 5 days to 360 days. We also have short-term debt from
consolidations.
F-52
FANNIE MAE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)