On Nov. 20, 2007, Standard&Poor's Ratings Services revised its outlook on its 'AA-' risk to the government, subordinated debt, and preferred stock ratings on Freddie Mac to negative from stable. At the same time, we affirmed our 'AAA' senior secured and senior unsecured debt ratings on Freddie Mac. The outlook on these ratings is stable. The negative outlook on the risk to the government rating, subordinated debt, and preferred stock ratings reflects the weaker earnings and the outlook for lower earnings in the near-to-intermediate term given the continued high degree of GAAP earnings volatility, primarily driven by accounting mark-to-market-standards. Freddie Mac's core asset-quality metrics remain quite strong. Serious delinquencies are rising, but are still at the low level
