Repurchase Operation Details: Reference Notes® Securities
Freddie Mac conducts periodic repurchases of outstanding Reference
Notes® securities for asset/liability management purposes. This
program reflects the input of numerous domestic and overseas investors and safeguards
the transparency, liquidity, and predictability of Reference Notes securities.
Repurchase operations focus exclusively on older, off-the-run issues and preserve
the outstanding supply of active, on-the-run Reference Notes securities. Freddie
Mac conducts its periodic repurchase operations via the Internet with designated
dealer group members.
Transparent operations. Freddie Mac provides
overnight advance public notice of Reference Notes securities repurchases. In
exceptional circumstances, we may conduct periodic repurchase operations with
one-hour notice. Announcements will include target issues, the cut-off time
for offers, and the maximum purchase amount. Freddie Mac announces periodic
repurchase operations via designated dealers, our website, and all major newswires.
Periodic repurchase operations may target several
issues at the same time, and dealers may submit several offers per
issue. Participating dealers submit offers on a yield basis. After
the cutoff time, Freddie Mac considers all offerings together and
accepts those offerings which best meet repurchase operation objectives.
Freddie Mac expects to return an automated response to dealers within
5 minutes after the cut-off time for submission of offers. Within
15 minutes following repurchase operations, Freddie Mac discloses,
via its website and major newswires, the amount of each issue repurchased
and the overall offer-to-cover ratio.
Liquid Yield Curve. In order
to maintain a liquid Reference Notes securities yield curve Freddie Mac will
focus the periodic repurchase operations on Reference Bonds securities and off-the-run
Reference Notes securities. Freddie Mac will maintain an outstanding balance
of at least the greater of $3 billion for Reference Notes securities, and at
least $1 billion for Reference Bonds securities.
Predictable timetable. Freddie
Mac expects to provide overnight advance notice and post results within 15 minutes
after completing repurchase operations. Any departure from this timetable should
be rare and only in exceptional circumstances. Freddie Mac's website displays
final issue size, repurchase activity and current outstanding supply, minimum
outstanding size, and remaining amounts eligible for repurchases. Information
services (such as Bloomberg) are updated to reflect any changes in amounts outstanding
of Reference Notes securities. Repurchased securities are permanently retired.
Freddie Mac will not repurchase Reference Notes issues from the
same maturity sector as any issue being currently offered pursuant to the Reference
Notes securities Funding Calendar. A lockout period – extending from one
week prior to the monthly Reference Notes securities announcement date through
the ensuing settlement date – will be observed.
Settlement of all Reference Notes securities repurchases will be via the Federal Reserve's book-entry system
on the first business day after the trade date ("T+1").
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