Freddie Mac

The stable outlooks on our ratings on Freddie Mac's debt issues reflect the stable outlook on our sovereign rating on the U.S. In our base case, we don't anticipate any changes to the company's business model, market position, or other factors in the next two years that would alter our view that it would almost certainly receive extraordinary support from the government if needed. We're uncertain when and how Freddie Mac and Fannie Mae will exit conservatorship. It would most likely only take place when Congress passes broader housing finance legislation, although it could happen through administrative action. For now, we expect the GREs to keep taking steps toward making housing finance reform more feasible, including building capital. Even if

...Our ratings on Freddie Mac's senior unsecured debt are in line with our sovereign credit rating on the U.S. because we think the government would almost certainly provide extraordinary support if needed. S&P Global Ratings views Freddie Mac as having an integral link to the government and a critical role in carrying out U.S. housing policy. Our view is supported by past government actions, especially during periods of economic uncertainty--actions that included providing additional liquidity, permitting mortgage forbearance, and purchasing residential mortgage-backed securities. The absence of Freddie Mac (and close peer Fannie Mae) would likely reverberate throughout the U.S. housing market unless housing reforms were enacted to replace the support the government-related entities (GREs) provide to the market. In our view, the senior preferred stock purchase agreements (SPSPAs) that Freddie Mac and Fannie Mae entered into with the Treasury in 2008 further underscore the importance of the...

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