Freddie Mac 2015 Annual Report Download - page 156

Management's Discussion and Analysis Liquidity and Capital Resources | Liquidity Profile
Freddie Mac 2015 Form 10-K 154
SUBORDINATED DEBT
During 2015 and 2014, we did not call or issue any Freddie SUBS® securities. At both December 31,
2015 and 2014, the balance of our subordinated debt outstanding was $0.4 billion. Under the Purchase
Agreement, we may not issue subordinated debt without Treasury’s consent.
CREDIT RATINGS
Our ability to access the capital markets and other sources of funding, as well as our cost of funds, is
highly dependent upon our credit ratings. The table below indicates our credit ratings as of February 4,
2016.
Nationally Recognized Statistical Rating
Organization
S&P Moody's Fitch
Senior long-term debt AA+ Aaa AAA
Short-term debt A-1+ P-1 F1+
Subordinated debt AA- Aa2 AA-
Preferred stock(1) D Ca C/RR6
Outlook Stable Stable Stable
(1) Does not include senior preferred stock issued to Treasury.
Our credit ratings and outlooks are primarily based on the support we receive from Treasury, and
therefore, are affected by changes in the credit ratings and outlooks of the U.S. government.
A security rating is not a recommendation to buy, sell or hold securities. It may be subject to revision or
withdrawal at any time by the assigning rating organization. Each rating should be evaluated
independently of any other rating.
LIQUIDITY AND CONTINGENCY OPERATING PORTFOLIO
Excluding amounts related to our consolidated VIEs and collateral held by us from OTC derivative
counterparties, we held $70.0 billion and $53.9 billion in the aggregate of cash and cash equivalents,
securities purchased under agreements to resell, and non-mortgage-related securities at December 31,
2015 and 2014, respectively. These investments are important to our cash flow, collateral management,
and asset and liability management, and our ability to provide liquidity and stability to the mortgage
market. At December 31, 2015, our non-mortgage-related securities consisted of U.S. Treasury securities
that we could sell to provide us with an additional source of liquidity to fund our business operations. We
also maintained non-interest-bearing deposits at the Federal Reserve Bank of New York, which are
included in cash and cash equivalents on our consolidated balance sheets.