Fannie Mae's risk to the government credit rating refers to the inherent default risk of a federally related entity operating under its authorizing legislation, but without assuming an infusion of cash by the federal government. In evaluating the risk to the government, the underlying or inherent credit quality of the entity is reviewed. In determining Fannie Mae's risk-to-the-government credit rating, Standard&Poor's has incorporated the evaluation of such factors as business fundamentals, including Fannie Mae's competitive position, evaluation of management and its strategies, and examination of relevant financial measures. The rating reflects Fannie Mae's very strong business franchise, its consistent operating performance, extraordinary efficiency, strong asset quality, favorable access to funds, and adequate risk-adjusted capitalization. Fannie Mae has demonstrated
