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Slide 1: Reference REMICSM Securities A Mortgage-Backed Securities Investment Innovation Offered by Freddie Mac April 2005
Slide 2: Safe Harbor Statements Freddie Mac obligations Freddie Mac’s securities are obligations of Freddie Mac only. The securities, including any interest or return of discount on the securities, are not guaranteed by and are not debts or obligations of the United States or any federal agency or instrumentality other than Freddie Mac. No offer or solicitation of securities This presentation includes information related to, or referenced in the offering documentation for, certain Freddie Mac securities, including offering circulars and related supplements and agreements. Freddie Mac securities may not be eligible for offer or sale in certain jurisdictions or to certain persons. This information is provided for your general information only, is current only as of its specified date and does not constitute an offer to sell or a solicitation of an offer to buy securities. The information does not constitute a sufficient basis for making a decision with respect to the purchase or sale of any security. All information regarding or relating to Freddie Mac securities is qualified in its entirety by the relevant offering circular and any related supplements. Investors should review the relevant offering circular and any related supplements before making a decision with respect to the purchase or sale of any security. In addition, before purchasing any security, please consult your legal and financial advisors for information about and analysis of the security, its risks and its suitability as an investment in your particular circumstances. Forward-looking statements Freddie Mac's presentations sometimes contain forward-looking statements pertaining to management's current expectations as to Freddie Mac's objectives for financial reporting, future business plans, results of operations, financial condition and trends. Management's expectations for the corporation's future necessarily involve a number of assumptions and estimates, and various factors could cause actual results to differ materially from these expectations. These assumptions and factors are discussed in the Information Statement dated September 24, 2004, and supplements thereto, which is available on our internet website: http://www.FreddieMac.com. © 2005 by Freddie Mac. No part of this document may be duplicated, reproduced, distributed or displayed in public in any manner or by any means without the written permission of Freddie Mac. 1
Slide 3: Reference REMIC securities: product description ! Quarterly issuance of REMIC securities with a guaranteed maturity class (GMC) offered through a syndicate underwriting group; initial Reference REMIC security expected to be at least $2 billion Minimum GMC tranche size of $1 billion with shortened stated final maturity date guaranteed by Freddie Mac (e.g., 3/5/7/10/12 year) Integrated into Freddie Mac’s Reference suite of products, Reference Bills, Reference Notes and Euro Reference Notes, featuring: » Liquidity » Transparency » Calendar-based predictability Designed to further Freddie Mac’s housing mission by broadening the investor base for mortgage-backed securities ! ! ! 2
Slide 4: Reference REMIC securities: liquidity More liquid than traditional structured securities ! ! ! Quarterly issuance commitment, GMC minimum tranche size of $1 billion with multiple offerings of each tranche intended Syndication process ensures broad dealer sponsorship and secondary market support First REMIC (CMO) available for trading on TradeWeb ® platform 3
Slide 5: Reference REMIC securities: transparency Transparent structures and pricing ! ! ! ! ! Syndication process ensures transparent trade pricing at market clearing levels Intraday and daily closing prices posted to TradeWeb; daily pricing posted to Bloomberg PCs underlying the offered GMC are disclosed prior to pricing Disclosure available on www.freddiemac.com/mbs and other third party data sources Identified as the R series (e.g., R001) 4
Slide 6: Reference REMIC securities: calendar-based predictability More predictable securities ! ! ! ! Pre-announced quarterly issuance calendar Maximum two Reference REMIC GMC deals issued per quarter Average life extension limited by shortened stated final maturity date Backed by Freddie Mac Gold PCs 5
Slide 7: Reference REMIC securities: illustrative calendar April 2005 Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 Factors Released 3 4 R001 Offering Circular Supplement 11 Printed 15-yr REG settle R001 GMC Offered 17 18 19 20 21 22 5 30-yr REG settle 12 R001 Base REMIC Issued 13 14 6 7 TradeWeb Composite Screen Online 8 2 9 10 15 16 23 24 25 26 27 28 29 30 6
Slide 8: Reference REMIC securities: pricing Pricing on TradeWeb1 Platform Composite Monitor Sample Customer Inquiry Trade Ticket Sample 1Freddie Mac is not responsible for pricing and other information about its securities posted on Thomson TradeWeb. 7
Slide 9: Reference REMIC securities: attributes comparison Product Reference REMIC Reference Notes Syndicated Callables TBA Passthroughs ABS REMIC securities Specified Pools TradeWeb Eligibility Daily Closes Issuance Extension Syndicate Calendar Protection Led √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √* √* √ √ * Some, not all REMIC and ABS issuances, are extension protected 8
Slide 10: Reference REMIC securities: product details Reference REMIC Product Details Underlying Gold PCs Guaranteed Maturity Class (GMC) Structure GMC Tranche Size REMIC Size Offering Frequency for 2005 Concurrent Reference REMIC Deals Distribution Period PCs underlying the offered GMC are disclosed prior to pricing Varying maturities based on market conditions (e.g., 3/5/7/10/12-year) Announced during pre-marketing period Minimum of $1 billion Minimum REMIC size subject to GMC tranche size Calendar-based, quarterly issuance. GMC tranche offerings are intended up to once per month throughout the quarter Yes, for deals backed by underlyng PCs of different terms or coupons, but no more than 2 deals per quarter From initial offering settlement date to the earlier of: ° 90 days or ° Subsequent issuance of Reference REMIC security backed by underlying Gold PCs of the same mortgage term and coupon Re-REMICs will be available following distribution period MACR exchanges will be available following distribution period Yes Re-REMIC Eligibility MACR Eligibility TradeWeb Eligibility 9