GE 2005 Annual Report Download - page 134

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(134)
All other instruments
Based on comparable market transactions, discounted future cash flows, quoted market prices, and/or estimates of
the cost to terminate or otherwise settle obligations.
Additional information about certain categories in the table above follows.
Residential mortgages
Residential mortgage products amounting to $12,633 million at December 31, 2005, were either high loan-to-value
loans or those permitting interest-only payments. We originate such loans either for our portfolio or for sale in
secondary markets. In both cases, higher yields compensate for the increased risk. The portfolio was geographically
diverse, with Europe and North America the most significant market segments.
Insurance-credit life
Certain insurance affiliates, primarily in Consumer Finance, issue credit life insurance designed to pay the balance
due on a loan if the borrower dies before the loan is repaid. As part of our overall risk management process, we cede
to third parties a portion of this associated risk, but are not relieved of our primary obligation to policyholders.
LOAN COMMITMENTS
Notional amount
December 31 (In millions) 2005
2004
Ordinary course of business lending commitments
Fixed rate $4,648
$2,260
Variable rate 7,026
8,145
Unused revolving credit lines(a)
Commercial
Fixed rate 779
1,210
Variable rate 20,779
21,411
Consumer – principally credit cards
Fixed rate 170,367
141,965
Variable rate 281,113
200,219
(a) Excluded inventory financing arrangements, which may be withdrawn at our option, of $11.4 billion and $8.9 billion as of December 31,
2005 and 2004, respectively.
Note 28
Securitization Entities
We securitize financial assets in the ordinary course of business to improve shareowner returns. The securitization
transactions we engage in are similar to those used by many financial institutions. Beyond improving returns, these
securitization transactions serve as funding sources for a variety of diversified lending and securities transactions.
Historically, we have used both GE-supported and third-party entities to execute securitization transactions funded
in the commercial paper and term bond markets.