Fannie Mae 2009 Annual Report Download - page 329

Debt from Consolidations and Secured Borrowings
Debt from consolidations includes debt from both MBS trust consolidations and certain secured borrowings.
Debt from MBS trust consolidations represents our liability to third-party beneficial interest holders when we
have included the assets of a corresponding trust in our consolidated balance sheets and we do not own all of
the beneficial interests in the trust. Long-term debt from these transactions recognized in our consolidated
balance sheets as of December 31, 2009 and 2008 was $5.2 billion and $5.1 billion, respectively.
Additionally, we record a secured borrowing, to the extent of proceeds received, upon a transfer of financial
assets from our consolidated balance sheets that does not qualify as a sale. Long-term debt from these
transactions in our consolidated balance sheets as of December 31, 2009 and 2008 was $949 million and
$1.2 billion, respectively.
Characteristics of Debt
As of December 31, 2009 and 2008, the face amount of our debt securities was $784.0 billion and
$881.2 billion, respectively. As of December 31, 2009 and 2008, we had zero-coupon debt with a face amount
of $226.5 billion and $350.5 billion, respectively, which had an effective interest rate of 0.67% and 1.9%,
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, 2009 and 2008 included $210.2 billion and
$192.5 billion, respectively, of callable debt that could be redeemed in whole or in part at our option any time
on or after a specified date.
The following table displays the amount of our long-term debt as of December 31, 2009 by year of maturity
for each of the years 2010 through 2014 and thereafter. The first column assumes that we pay off this debt at
maturity or on the call date if the call has been announced, 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)
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $115,095 $296,629
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,642 89,486
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,532 46,906
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,708 28,426
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,564 44,345
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,409 62,158
Debt from consolidations
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,167 6,167
Total
(2)(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $574,117 $574,117
(1)
Contractual maturity of debt from consolidations is not a reliable indicator of expected maturity because borrowers of
the underlying mortgage loans generally have the right to prepay their obligations at any time.
(2)
Reported amount includes a net discount and other cost basis adjustments of $15.6 billion.
(3)
Includes a portion of structured debt instruments that is reported at fair value.
F-71
FANNIE MAE
(In conservatorship)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)