The long term issuer Default Ratings (IDRs) of mortgage giants Fannie Mae and Freddie Mac, Fitch Ratings, has just confirmed both Government Sponsored Enterprises credit ratings will remain at 'AAA'. This is of course simply due to the fact that Fannie and Freddie ARE Government Sponsored Enterprises, and the federal government has guaranteed that they will remain financially solvent . Due to this, Fitch says the rating outlook for the two GSE's will remain "stable". Fitchs' actions follow its affirmation of the AAA Issuer Default Rating and stable outlook on the US Government.
The agency cited a recent report from the administration issued in February 2011, which said the government is committed to ensuring that both organizations have sufficient capital to satisfy all mortgage guarantees, issued now or in the future. The report also stressed that the administration will not pursue policies or reforms that would impair the ability of the GSEs to honor. With full backing by the Federal Government and virtually unlimited "capital", how could they possibly NOT be credit worthy! In reality, aren't they just rating the governments ability to borrow more money FROM the government?
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