On May 19, 2008, Standard&Poor's Ratings Services affirmed its 'AAA/A-1+' senior unsecured debt rating and its 'AA-' subordinated debt and preferred stock ratings on Fannie Mae. At the same time, we lowered our risk-to-the-government rating on Fannie Mae to 'A+' from 'AA-'. The preferred stock, subordinated debt, and risk-to-the-government ratings were removed from CreditWatch Negative where they were placed on May 6, 2008. The outlook on all ratings except the senior unsecured debt rating is negative. The outlook on the senior unsecured debt rating is stable. The lower risk-to-the-government rating reflects Fannie Mae's weak earnings and pressured capital ratios, which are outside the tolerance for a 'AA-' rating. Fannie Mae has posted three consecutive quarterly losses, ending with
