Fannie Mae 2008 Annual Report Download - page 153

Debt Funding Programs
The most significant of the debt funding programs that we conduct are the following:
•Benchmark Securities».Through our Benchmark Securities program, we sell large, regularly scheduled
issues of unsecured debt. The Benchmark Securities program includes:
•Benchmark Bills which have maturities of up to one year. On a weekly basis, we auction three-month
and six-month Benchmark Bills with a minimum issue size of $1.0 billion. On a monthly basis, we
auction one-year Benchmark Bills with a minimum issue size of $1.0 billion.
•Benchmark Notes which have maturities ranging between two and ten years. We typically sell one or
more new, fixed-rate issues of Benchmark Notes each month through dealer syndicates.
•Discount Notes. We issue short-term debt securities called Discount Notes with maturities ranging from
overnight to 360 days from the date of issuance. Investors purchase these notes at a discount to the
principal amount and receive the principal amount when the notes mature.
•Medium-Term Notes. We issue medium-term notes, or MTNs, with a wide range of maturities, interest
rates and call features. The specific terms of our MTN issuances are determined through individually-
negotiated transactions with broker-dealers. Our MTNs are often callable prior to maturity. We issue both
fixed-rate and floating-rate securities, as well as various types of structured notes that combine features of
traditional debt with features of other capital market instruments.
•Subordinated Debt. Pursuant to voluntary initiatives with Treasury in October 2000, which were
subsequently replaced by the September 2005 agreement with OFHEO that we discuss in more detail
below, we have issued subordinated debt. Information relating to our subordinated debt is provided under
“Capital Management—Capital Activity—Subordinated Debt.” Pursuant to the senior preferred stock
purchase agreement, we are prohibited from issuing additional subordinated debt without the consent of
Treasury. In addition, FHFA has directed us not to issue subordinated debt during the conservatorship and
thereafter until directed otherwise.
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