Freddie Mac 2011 Annual Report Download - page 183

Spreads on our debt and our access to the debt markets remained favorable relative to historical levels during the
three months and year ended December 31, 2011, due largely to support from the U.S. government. As a result, we were
able to replace certain higher cost debt with lower cost debt. Our short-term debt was 24% of outstanding other debt at
December 31, 2011 as compared to 28% at December 31, 2010. Beginning in the fourth quarter of 2011, we started
issuing a higher percentage of long-term debt. This allows us to take advantage of attractive long-term rates while
decreasing our reliance on interest-rate swaps, which may lessen the volatility of derivative gains (losses) on our
consolidated statements of income and comprehensive income. For more information about derivative gains (losses), see
“CONSOLIDATED RESULTS OF OPERATIONS — Non-Interest Income (Loss) — Derivative Gains (Losses).”
Because of the debt limit under the Purchase Agreement, we may be restricted in the amount of debt we are allowed
to issue to fund our operations. Our debt cap under the Purchase Agreement was $972 billion in 2011 and declined to
$874.8 billion on January 1, 2012. As of December 31, 2011, we estimate that the par value of our aggregate indebtedness
totaled $674.3 billion, which was approximately $297.7 billion below the applicable debt cap. As of December 31, 2010,
we estimate that the par value of our aggregate indebtedness totaled $728.2 billion, which was approximately
$351.8 billion below the then applicable limit of $1.08 trillion. Our aggregate indebtedness is calculated as the par value
of other debt. We disclose the amount of our indebtedness on this basis monthly under the caption “Other Debt
Activities — Total Debt Outstanding” in our Monthly Volume Summary reports, which are available on our web site at
www.freddiemac.com and in current reports on Form 8-K we file with the SEC.
Other Debt Issuance Activities
The table below summarizes the par value of other debt securities we issued, based on settlement dates, during 2011
and 2010.
Table 67 — Other Debt Security Issuances by Product, at Par Value
(1)
2011 2010
Year Ended December 31,
(in millions)
Other short-term debt:
Reference Bills»securities and discount notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $412,165 $481,853
Medium-term notes — callable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,500
Medium-term notes — non-callable
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 1,364
Total other short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412,615 484,717
Other long-term debt:
Medium-term notes — callable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,464 219,847
Medium-term notes — non-callable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,810 74,487
U.S. dollar Reference Notes»securities — non-callable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47,500 36,500
Total other long-term debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297,774 330,834
Total other debt issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $710,389 $815,551
(1) Excludes federal funds purchased and securities sold under agreements to repurchase, and lines of credit. Also excludes debt securities of
consolidated trusts held by third parties.
(2) Includes $450 million and $1.4 billion of medium-term notes — non-callable issued for the years ended December 31, 2011 and 2010, respectively,
which were related to debt exchanges.
Other Short-Term Debt
We fund our operating cash needs, in part, by issuing Reference Bills»securities and other discount notes, which are
short-term instruments with maturities of one year or less that are sold on a discounted basis, paying only principal at
maturity. Our Reference Bills»securities program consists of large issues of short-term debt that we auction to dealers on
a regular schedule. We issue discount notes with maturities ranging from one day to one year in response to investor
demand and our cash needs. Short-term debt also includes certain medium-term notes that have original maturities of one
year or less.
Other Long-Term Debt
We issue debt with maturities greater than one year primarily through our medium-term notes program and our
Reference Notes»securities program.
Medium-term Notes
We issue a variety of fixed- and variable-rate medium-term notes, including callable and non-callable fixed-rate
securities, zero-coupon securities and variable-rate securities, with various maturities ranging up to 30 years. Medium-term
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