Freddie Mac 2004 Annual Report Download - page 199

NOTE 8: DEBT SECURITIES AND SUBORDINATED BORROWINGS
Debt securities are classiÑed as either Due within one year or Due after one year based on their remaining
contractual maturity. Table 8.1 summarizes the balances and eÅective interest rates at December 31, 2004 and
2003 for debt securities, as well as subordinated borrowings.
Table 8.1 Ì Total Debt Securities, Net
December 31,
2004 2003
Balance, EÅective Balance, EÅective
Net(1) Rate(2) Net(1) Rate(2)
(dollars in millions)
Senior debt, due within one year:
Short-term debt securities(3) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $196,639 2.05% $212,035 1.11%
Current portion of long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 85,664 3.33 83,227 3.61
Senior debt, due within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 282,303 2.44 295,262 1.81
Senior debt, due after one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 443,772 4.36 438,738 4.34
Subordinated debt, due after one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,622 6.15 5,613 6.15
Senior and subordinated debt, due after one yearÏÏÏÏÏÏÏÏÏÏÏÏ 449,394 4.38 444,351 4.36
Total debt securities, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $731,697 $739,613
(1) Includes unamortized discounts and premiums. Current portion of long-term debt, and Senior and subordinated debt, due after one
year, also include foreign-currency-related and hedging-related basis adjustments.
(2) Represents the weighted average eÅective rate at the end of the period, which includes the amortization of discounts or premiums
and issuance costs, but excludes the amortization of foreign-currency-related and hedging-related basis adjustments.
(3) EÅective rate previously reported for December 31, 2003 has been revised.
Freddie Mac Ñnances the purchase of mortgage loans and mortgage-related securities primarily through
the issuance of Senior debt and Subordinated debt.
Senior Debt, Due Within One Year
As indicated in Table 8.2, a majority of Senior debt, due within one year (excluding current portion of
long-term debt) consisted of discount notes, paying only principal at maturity. Discount notes and medium-
term notes are unsecured general obligations. Certain medium-term notes that have original maturities of one
year or less are classiÑed as Short-term debt securities. Securities sold under agreements to repurchase are
eÅectively collateralized borrowing transactions where Freddie Mac sells securities with an agreement to
repurchase such securities. These agreements require the underlying securities to be delivered to the dealers
who arranged the transactions. Federal funds purchased are unsecuritized borrowings from commercial banks
that are members of the Federal Reserve System.
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