On Nov. 5, 2008, Standard&Poor's Ratings Services raised its subordinated debt rating on Fannie Mae to 'A' from 'BBB+' and removed the rating from CreditWatch Positive where it was placed Sept. 7, 2008. The outlook is stable. The 'A' subordinated debt rating reflects our view of both the explicit support these securities receive from the 'AAA' rated U.S. government, and Fannie Mae's weakened financial profile. Fannie Mae's primary regulator, the Federal Housing Finance Agency (FHFA), in its capacity as conservator, has effectively suspended the interest-deferral provision of Fannie Mae's subordinated debt, which we believe will permit the timely payment of principal and interest on its subordinated debt while the company operates under conservatorship. This explicit support provided for
