Fannie Mae 2008 Annual Report Download - page 350

The table below displays the amount of our debt called and repurchased and the associated weighted-average
interest rates for the years ended December 31, 2008, 2007 and 2006.
2008 2007 2006
For The Year Ended December 31,
(Dollars in millions)
Debt called. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $158,988 $86,321 $24,137
Weighted-average interest rate of debt called . . . . . . . . . . . . . . . . . . . . . . . . 5.3% 5.6% 5.9%
Debt repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,214 $15,217 $15,515
Weighted-average interest rate of debt repurchased . . . . . . . . . . . . . . . . . . . . 4.8% 5.6% 4.7%
Intraday Lines of Credit
We periodically use secured and unsecured intraday funding lines of credit provided by several large financial
institutions. We post collateral which, in some circumstances, the secured party has the right to repledge to
third parties. As these lines of credit are uncommitted intraday loan facilities, we may not be able to draw on
them if and when needed. As of December 31, 2008 and 2007, we had secured uncommitted lines of credit of
$30.0 billion and $28.0 billion, respectively, and unsecured uncommitted lines of credit of $500 million and
$2.5 billion, respectively. No amounts were drawn on these lines of credit as of December 31, 2008 or 2007.
Credit Facility with Treasury
On September 19, 2008, we entered into a lending agreement with Treasury under which we may request
loans until December 31, 2009. Loans under the Treasury credit facility require approval from Treasury at the
time of request. Treasury is not obligated under the credit facility to make, increase, renew or extend any loan
to us. The credit facility does not specify a maximum amount that may be borrowed under the credit facility,
but any loans made to us by Treasury pursuant to the credit facility must be collateralized by Fannie Mae
MBS or Freddie Mac mortgage-backed securities.
The credit facility does not specify the maturities or interest rate of loans that may be made by Treasury under
the credit facility. In a Fact Sheet regarding the credit facility published by Treasury on September 7, 2008,
Treasury indicated that loans made pursuant to the credit facility will be for short-term durations and would in
general be expected to be for less than one month but no shorter than one week. The Fact Sheet further
indicated that the interest rate on loans made pursuant to the credit facility ordinarily will be based on the
daily LIBOR rate for a similar term of the loan plus 50 basis points. As of February 26, 2009, we have not
drawn on this credit facility. If we borrow under this credit facility, we will account for the draws as secured
borrowings.
11. Derivative Instruments and Hedging Activities
Risk Management Derivatives and Mortgage Commitment Derivatives
Derivative instruments are an integral part of our strategy in managing interest rate risk. Derivative instruments
may be privately negotiated contracts, which are often referred to as over-the-counter (“OTC”) derivatives, or
they may be listed and traded on an exchange. When deciding whether to use derivatives, we consider a
number of factors, such as cost, efficiency, the effect on our liquidity and capital, and our overall interest rate
risk management strategy. We choose to use derivatives when we believe they will provide greater relative
value or more efficient execution of our strategy than debt securities. We report derivatives at fair value as
either assets or liabilities, net for each counterparty inclusive of cash collateral paid or received, in our
F-72
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)