Freddie Mac 2010 Annual Report Download - page 226

security for their obligations to us, including their obligations to repurchase mortgages sold to us in breach of representations
and warranties.
In addition, we hold cash and cash equivalents as collateral primarily in connection with certain of our multifamily
guarantees as credit enhancements. The cash and cash equivalents held as collateral related to these transactions at
December 31, 2010 and 2009 was $550 million and $322 million, respectively.
Collateral Pledged by Freddie Mac
We are required to pledge collateral for margin requirements with third-party custodians in connection with secured
financings and derivative transactions with some counterparties. The level of collateral pledged related to our derivative
instruments is determined after giving consideration to our credit rating. As of December 31, 2010, we had one uncommitted
intraday line of credit with a third party, which is secured, in connection with the Federal Reserve’s payments system risk
policy, which restricts or eliminates delinquent overdrafts by the GSEs, in connection with our use of the Fedwire system. In
certain circumstances, the line of credit agreement gives the secured party the right to repledge the securities underlying our
financing to other third parties, including the Federal Reserve Bank. We pledge collateral to meet our collateral requirements
under the line-of-credit agreement upon demand by the counterparty.
Table 8.10 summarizes all securities pledged as collateral by us, including assets that the secured party may repledge
and those that may not be repledged.
Table 8.10 — Collateral in the Form of Securities Pledged
2010 2009
December 31,
(in millions)
Securities pledged with the ability for the secured party to repledge:
Debt securities of consolidated trusts held by third parties
(1)
.......................................... $ 9,915 $ —
Available-for-sale securities ................................................................. 817 10,879
Securities pledged without the ability for the secured party to repledge:
Debt securities of consolidated trusts held by third parties
(1)
.......................................... 5 —
Available-for-sale securities ................................................................. — 302
Total securities pledged . . . . ................................................................. $10,737 $11,181
(1) Commencing January 1, 2010, represents PCs held by us in our Investments segment mortgage investments portfolio and pledged as collateral. As a
result of the change in accounting principles, this amount is recorded as a reduction to debt securities of consolidated trusts held by third parties on our
consolidated balance sheets.
Securities Pledged with the Ability of the Secured Party to Repledge
At December 31, 2010, we pledged securities with the ability of the secured party to repledge of $10.7 billion, of which
$10.5 billion was collateral posted in connection with our uncommitted intraday line of credit with a third party as discussed
above.
At December 31, 2009, we pledged securities with the ability of the secured party to repledge of $10.9 billion, of which
$10.8 billion was collateral posted in connection with our uncommitted intraday line of credit with a third party as discussed
above.
There were no borrowings against the line of credit at December 31, 2010 or 2009. The remaining $0.2 billion and
$0.1 billion of collateral posted with the ability of the secured party to repledge at December 31, 2010 and 2009,
respectively, was posted in connection with our futures transactions.
Securities Pledged without the Ability of the Secured Party to Repledge
At December 31, 2010 and 2009, we pledged securities without the ability of the secured party to repledge of
$5 million and $302 million, respectively, at a clearinghouse in connection with our futures transactions.
Collateral in the Form of Cash Pledged
At December 31, 2010, we pledged $8.5 billion of collateral in the form of cash and cash equivalents, all but
$40 million of which related to our derivative agreements as we had $9.4 billion of such derivatives in a net loss position. At
December 31, 2009, we pledged $5.8 billion of collateral in the form of cash and cash equivalents, of which $5.6 billion
related to our derivative agreements as we had $6.0 billion of such derivatives in a net loss position. The remaining
$40 million and $220 million was posted at clearinghouses in connection with our securities and other derivative transactions
at December 31, 2010 and 2009, respectively.
NOTE 9: DEBT SECURITIES AND SUBORDINATED BORROWINGS
Debt securities that we issue are classified on our consolidated balance sheets as either debt securities of consolidated
trusts held by third parties or other debt that we issue to fund our operations. Commencing with our adoption of two new
accounting standards on January 1, 2010, the mortgage loans that are held by the consolidated securitization trusts are
223 Freddie Mac