Fitch Ratings has affirmed Freddie Mac's debt and preferred stock ratings and removed from Rating Watch Negative its subordinated debt and preferred stock ratings.The affirmed ratings were as follows: issuer default, AAA; long-term senior debt, AAA; short-term debt, F1-plus; subordinated debt, AA-minus; and preferred stock, AA-minus. In addition, Fitch said it has assigned a support rating of 1 to the government-sponsored enterprise, meaning that the rating agency believes Freddie Mac's senior debt obligations and guaranteed mortgage-backed securities "would receive external support should it become necessary." Fitch noted that it had placed Freddie's subordinated debt and preferred stock ratings on Rating Watch Negative in June 2003 and lowered them in August 2003 "as internal control, accounting, and management issues unfolded." The rating outlook for all the GSE's rated instruments has now been returned to Stable, Fitch said, "following demonstration of Freddie Mac's ability to sustain solid business performance, address pricing pressures, enhance the accounting and financial reporting infrastructure, and progress towards timely and accurate financial reporting." Fitch can be found online at http://www.fitchratings.com.

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