Freddie Mac 2015 Annual Report Download - page 233

Financial Statements Notes to the Consolidated Financial Statements | Note 3
Freddie Mac 2015 Form 10-K 231
In connection with the securitization activities of the Multifamily segment, we have various forms of credit
protection. The most prevalent type is subordination, primary through our K Certificates. Through
subordination, we mitigate our credit risk exposure by structuring our securities to sell the vast majority of
expected credit losses to private investors who purchase the subordinate tranches, as shown in the table
below.
UPB at Maximum Coverage(1) at
(in millions) December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
K Certificates $ 101,473 $75,541 $18,453 $13,576
Other securitization products 7,026 5,496 1,477 1,495
Total $ 108,499 $ 81,037 $19,930 $15,071
(1) For K Certificates, this represents the UPB of the securities that are subordinate to our guarantee. For other securitization
products, this represents the remaining amount of loss recovery that is available subject to the terms of the counterparty
agreement or the UPB of securities that are subordinate to our guarantee.