Fannie Mae's Ratings Affirmed

Fannie Mae's financial reporting plans for fiscal year-end 2004 caused Fitch Ratings to affirm Fannie's AAA senior debt rating, but the government-sponsored enterprise's AA- subordinated debt and A+ preferred stock ratings remain on Rating Watch Negative.

"The ratings are based on an expectation that Fannie Mae will meet the regulatory capital requirement excess of 30% in a timely manner and without issuance of any new preferred or common stock. In addition, Fannie Mae's reported measurement of interest rate and credit risks [remains] well within internal guidelines and are well managed. Capital also remains in excess of its regulatory risk based capital stresses," the rating agency said.

"Fannie Mae anticipates its fiscal reports for 2004 will not be completed until the second half of 2006. This has the potential for resulting in a delisting of their stock from the New York Stock Exchange under a recent ruling requiring financial statements to be filed within 12 months of their original due dates.

The distinction between the subordinated debt and preferred stock ratings remains. Additional rating actions may be taken should approval to pay preferred dividends be needed in the future," Fitch said.

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