Freddie Mac 2011 Annual Report Download - page 260

counterparties in accordance with the terms of the collateral agreements with such counterparties. As of December 31,
2011, we had one secured, uncommitted intraday line of credit with a third party in connection with the Federal Reserve’s
payments system risk policy, which restricts or eliminates daylight 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.
The table below summarizes all securities pledged as collateral by us, including assets that the secured party may
repledge and those that may not be repledged.
Table 7.10 — Collateral in the Form of Securities Pledged
2011 2010
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)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,293 $ 9,915
Available-for-sale securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 817
Securities pledged without the ability for the secured party to repledge:
Debt securities of consolidated trusts held by third parties
(1)
......................................... 88 5
Total securities pledged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,585 $10,737
(1) Represents PCs held by us in our Investments segment mortgage investments portfolio and pledged as collateral which are 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, 2011, we pledged securities with the ability of the secured party to repledge of $10.5 billion, of
which $10.5 billion was collateral posted in connection with our secured uncommitted intraday line of credit with a third
party as discussed above.
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 secured uncommitted intraday line of credit with a third
party as discussed above.
There were no borrowings against the line of credit at December 31, 2011 or 2010. The remaining $25 million and
$0.2 billion of collateral posted with the ability of the secured party to repledge at December 31, 2011 and 2010,
respectively, was posted in connection with our margin account related to futures transactions.
Securities Pledged without the Ability of the Secured Party to Repledge
At December 31, 2011 and 2010, we pledged securities without the ability of the secured party to repledge of
$88 million and $5 million, respectively, at a clearinghouse in connection with the trading and settlement of securities.
Collateral in the Form of Cash Pledged
At December 31, 2011, we pledged $12.7 billion of collateral in the form of cash and cash equivalents, all but
$133 million of which related to our derivative agreements as we had $12.7 billion of such derivatives in a net loss
position. 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 $9.3 billion of such derivatives in a net loss position.
The remaining $133 million and $40 million was posted at clearinghouses in connection with our securities and other
derivative transactions at December 31, 2011 and 2010, respectively.
NOTE 8: 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. We issue other debt to fund our operations.
Under the Purchase Agreement, without the prior written consent of Treasury, we may not incur indebtedness that
would result in the par value of our aggregate indebtedness exceeding 120% of the amount of mortgage assets we are
allowed to own on December 31 of the immediately preceding calendar year. Because of this debt limit, we may be
restricted in the amount of debt we are allowed to issue to fund our operations. Under the Purchase Agreement, the
amount of our “indebtedness” is determined without giving effect to the January 1, 2010 change in the accounting
guidance related to transfers of financial assets and consolidation of VIEs. Therefore, “indebtedness” does not include
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