24 May, 2006
S&P said May 24 that the AA- risk to the government, subordinated debt and preferred stock ratings of Fannie Mae remain on CreditWatch Negative, where they were placed on Sept. 23, 2004.
S&P said that the update follows Fannie Mae's agreement to implement corrective measures and pay a penalty of $400 million as part of the collective settlements with the Office of Federal Housing Enterprise Oversight and the SEC.
"The OFHEO consent order is the latest written agreement for Fannie Mae and includes the continuation of the requirement t maintain the 30% capital surplus over the minimum regulatory requirement and restrictions for increasing the mortgage portfolio above the December 31, 2005 level," S&P credit analyst Victoria Wagner said in a news release.
The agency said that the AAA/A1+ ratings of Fannie Mae's senior unsecured debt are not affected by the CreditWatch update. The senior unsecured ratings have a stable outlook.
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