Freddie Mac 2006 Annual Report Download - page 140

Lines of Credit
We opened intraday lines of credit with third-parties to provide additional liquidity to fund our intraday activities
through the Fedwire system in connection with the Federal Reserve Board's revised payments system risk policy, which
restricts or eliminates daylight overdrafts by GSEs, including us. At December 31, 2006, we had three uncommitted lines of
credit of which $20.0 billion is secured and $1.0 billion is unsecured. No amounts were drawn on these lines of credit at
December 31, 2006. We expect to continue to use these facilities from time to time to satisfy our intraday Ñnancing needs;
however, since the lines are uncommitted, we may not be able to draw on them if and when needed.
NOTE 9: STOCKHOLDERS' EQUITY
Preferred Stock
During 2006, we completed two preferred stock oÅerings consisting of three classes. We had no preferred stock oÅerings
during 2005. All 20 classes of preferred stock outstanding at December 31, 2006 have a par value of $1 per share. We have
the option to redeem these shares, on speciÑed dates, at their redemption price plus dividends accrued through the
redemption date. In addition, all 20 classes of preferred stock are perpetual and non-cumulative, and carry no signiÑcant
voting rights or rights to purchase additional Freddie Mac stock or securities. Costs incurred in connection with the issuance
of preferred stock are charged to Additional paid-in capital.
Table 9.1 provides a summary of our preferred stock outstanding at December 31, 2006.
Table 9.1 Ì Preferred Stock
Redemption Total
Shares Shares Total Par Price per Outstanding Redeemable NYSE
Issue Date Authorized Outstanding Value Share Balance(1) On or After(2) Symbol(3)
(in millions, except redemption price per share)
1996 Variable-rate(4) ÏÏÏ April 26, 1996 5.00 5.00 $ 5.00 $50.00 $ 250 June 30, 2001 FRE.prB
6.14% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ June 3, 1997 12.00 12.00 12.00 50.00 600 June 30, 2002 FRE.prD
5.81% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 27, 1997 3.00 3.00 3.00 50.00 150 October 27, 1998 (5)
5% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 23, 1998 8.00 8.00 8.00 50.00 400 March 31, 2003 FRE.prF
1998 Variable-rate(6) ÏÏÏ September 23 and 29, 1998 4.40 4.40 4.40 50.00 220 September 30, 2003 FRE.prG
5.1% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ September 23, 1998 8.00 8.00 8.00 50.00 400 September 30, 2003 FRE.prH
5.3% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 28, 1998 4.00 4.00 4.00 50.00 200 October 30, 2000 (5)
5.1% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 19, 1999 3.00 3.00 3.00 50.00 150 March 31, 2004 (5)
5.79% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ July 21, 1999 5.00 5.00 5.00 50.00 250 June 30, 2009 FRE.prK
1999 Variable-rate(7) ÏÏÏ November 5, 1999 5.75 5.75 5.75 50.00 287 December 31, 2004 FRE.prL
2001 Variable-rate(8) ÏÏÏ January 26, 2001 6.50 6.50 6.50 50.00 325 March 31, 2003 FRE.prM
2001 Variable-rate(9) ÏÏÏ March 23, 2001 4.60 4.60 4.60 50.00 230 March 31, 2003 FRE.prN
5.81% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ March 23, 2001 3.45 3.45 3.45 50.00 173 March 31, 2011 FRE.prO
6% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ May 30, 2001 3.45 3.45 3.45 50.00 173 June 30, 2006 FRE.prP
2001 Variable-rate(10)ÏÏÏ May 30, 2001 4.02 4.02 4.02 50.00 201 June 30, 2003 FRE.prQ
5.7% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 30, 2001 6.00 6.00 6.00 50.00 300 December 31, 2006 FRE.prR
5.81% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ January 29, 2002 6.00 6.00 6.00 50.00 300 March 31, 2007 (5)
2006 Variable-rate(11)ÏÏÏ July 17, 2006 15.00 15.00 15.00 50.00 750 June 30, 2011 FRE.prS
6.42% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ July 17, 2006 5.00 5.00 5.00 50.00 250 June 30, 2011 FRE.prT
5.9% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ October 16, 2006 20.00 20.00 20.00 25.00 500 September 30, 2011 FRE.prU
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 132.17 132.17 $132.17 $6,109
(1) Amounts stated at redemption value.
(2) As long as the capital monitoring framework established by the OÇce of Federal Housing Enterprise Oversight, or OFHEO, in January 2004 remains
in eÅect, any preferred stock redemption will require prior approval by OFHEO. See ""NOTE 10: REGULATORY CAPITAL'' for more
information.
(3) Preferred stock is listed on the New York Stock Exchange, or NYSE, unless otherwise noted.
(4) Dividend rate resets quarterly and is equal to the sum of three-month London Interbank OÅered Rate, or LIBOR, plus 1 percent divided by 1.377,
and is capped at 9.00 percent.
(5) Not listed on any exchange.
(6) Dividend rate resets quarterly and is equal to the sum of three-month LIBOR plus 1 percent divided by 1.377, and is capped at 7.50 percent.
(7) Dividend rate resets on January 1 every Ñve years after January 1, 2005 based on a Ñve-year Constant Maturity Treasury, or CMT, rate, and is capped
at 11.00 percent. Optional redemption on December 31, 2004 and on December 31 every Ñve years thereafter.
(8) Dividend rate resets on April 1 every two years after April 1, 2003 based on the two-year CMT rate plus 0.10 percent, and is capped at 11.00 percent.
Optional redemption on March 31, 2003 and on March 31 every two years thereafter.
(9) Dividend rate resets on April 1 every year based on 12-month LIBOR minus 0.20 percent, and is capped at 11.00 percent. Optional redemption on
March 31, 2003 and on March 31 every year thereafter.
(10) Dividend rate resets on July 1 every two years after July 1, 2003 based on the two-year CMT rate plus 0.20 percent, and is capped at 11.00 percent.
Optional redemption on June 30, 2003 and on June 30 every two years thereafter.
(11) Dividend rate resets quarterly and is equal to the sum of three-month LIBOR plus 0.50 percent but not less than 4.00 percent.
Stock Repurchase and Issuance Programs
During 2006, we repurchased $2.0 billion of outstanding shares of common stock and issued $1.5 billion of non-
cumulative, perpetual preferred stock in connection with a plan to replace $2.0 billion of common stock with an equal
amount of preferred stock. During the Ñrst quarter of 2007, we issued $1.1 billion of non-cumulative, perpetual preferred
stock, including $500 million to complete the planned issuance described above and $600 million to replace higher-cost
preferred stock that we redeemed in 2007. In accordance with OFHEO's capital monitoring framework, we obtained
128 Freddie Mac