not a national cost of funds, it may not behave as would a nationally based index. In addition,
the movement of COFI, as compared to other indices tied to specific interest rates, may be
affected by changes instituted by the FHLB of San Francisco in the method used to calculate
COFI. Investors can order an informational brochure explaining COFI by writing or calling the
FHLB of San Francisco's Marketing Department, P.O. Box 7948, San Francisco, California
94120, phone 415/616-2610. The current level of COFI can be obtained by calling the FHLB of
San Francisco at 415/616-2600.
If the FHLB of San Francisco fails to publish COFI for a period of 65 calendar days (an event
that will constitute an "Alternative Rate Event"), then the Trustee (or its agent) will calculate
the Interest Rates of the COFI Classes for the subsequent Accrual Periods by using, in place of
COFI, (i) the replacement index, if any, that the FHLB of San Francisco publishes or designates
or (ii) if the FHLB of San Francisco does not publish or designate a replacement index, an
alternative index selected by the Trustee (or its agent) and approved by Ginnie Mae that has
performed, or that the Trustee expects to perform, in a manner substantially similar to COFI. At
the time that the Trustee first selects an alternative index, the Trustee will determine the average
number of basis points, if any, by which the alternative index differed from COFI for whatever
period the Trustee, in its sole discretion, reasonably determines to reflect fairly the long-term
difference between COFI and the alternative index, and will adjust the alternative index by that
average. The Trustee (or its agent) will select a particular index as the alternative index only if it
receives an Opinion of Counsel that the selection of that index will not cause the related Trust
REMIC or Trust REMICs to lose their status as REMICs for federal income tax purposes.
If at any time after the occurrence of an Alternative Rate Event, the FHLB of San Francisco
resumes publication of COFI, the Interest Rates of the COFI Classes for each subsequent
Accrual Period will be calculated by reference to COFI.
Determination of the Treasury Index
Unless otherwise provided in the applicable Offering Circular Supplement, the Trustee (or
its agent) will calculate the Interest Rates of Treasury Index Classes for each Accrual Period
(after the first) on the Floating Rate Adjustment Date. On each Floating Rate Adjustment Date,
the Trustee will determine the applicable Treasury Index, which will be either (i) the weekly
average yield, expressed as a per annum rate, on U.S. Treasury securities adjusted to a constant
maturity of one, three, five, seven or ten years or to some other constant maturity (as specified
in the applicable Supplement) as published by the Federal Reserve Board in the most recent
edition of Federal Reserve Board Statistical Release No. H.15 (519) that is available to the
Trustee or (ii) the weekly auction average (investment) yield, expressed as a per annum rate,
on three-month or six-month U.S. Treasury bills that is available on the Treasury Public Affairs
Information Line, an automated telephone system.
The Statistical Release No. H.15 (519) is published by the Federal Reserve on Monday or
Tuesday of each week. Investors can order it from the Publications Department at the Board of
Governors of the Federal Reserve System, 21st and C Streets, N.W., M.S. 138, Washington, D.C.
20551. The Trustee will consider a new value for the Treasury Index to have been available on the
day following the date that Statistical Release No. H.15 (519) is released by the Federal Reserve
Board or the Public Debt News is placed on the Treasury Public Affairs Public Information Line
and available to the public.
The applicable auction average (investment) yield for a given week is the yield resulting
from the auction of three-month or six-month U.S. Treasury bills held the preceding week. The
weekly average yield reflects the average yields of the five calendar days ending on Friday of the
previous week. Yields on Treasury securities at "constant maturity" are estimated from the
Treasury's daily yield curve. This curve, which relates the yield on a security to its time to
maturity, is based on the closing market bid yields on actively traded Treasury securities in the
9