NEW YORK (Standard&Poor's) June 30, 2004—Standard&Poor's Ratings Services said today that Freddie Mac's (senior unsecured debt, AAA/A-1+) June 30, 2004, release of 2003 financial results does not affect the current ratings and outlook on Freddie Mac's securities. This marks continued progress on Freddie Mac's reaudit of its financial results and return to timely financial reporting. Freddie Mac's earnings volatility during the past two years is pronounced, especially the volatility driven by the GAAP accounting standards for derivatives. While earnings volatility is a critical rating factor, Freddie Mac's underlying core mortgage business and interest rate risk management posture remains solid. Also offsetting the earnings volatility associated with the inherent cyclical risk of the residential mortgage business and
