S&P: Freddie Mac 'AAA/A-1+' Senior Unsecured Debt Rating Affirmed; Others Off Watch, Lowered

NEW YORK, Aug. 11, 2008--Standard & Poor's Ratings Services said today that it affirmed its 'AAA/Stable/A-1+' senior unsecured debt rating on Freddie Mac.

At the same time, we lowered our subordinated debt and preferred stock ratings on Freddie Mac to 'A-' from 'AA-' and our risk-to-the government rating to 'A' from 'AA-'. These ratings are removed from CreditWatch Negative where they were placed July 25, 2008. The outlook is negative.

The affirmation of the 'AAA/A-1+' senior debt rating reflects the strong explicit and implicit U.S. government support these securities hold in the marketplace, as evidenced by the recent U.S. Treasury actions. This underscores the key public policy role and the key liquidity role the congressionally chartered government-sponsored enterprises (GSEs) have in the U.S. mortgage market.

"The lower risk-to-the-government, subordinated debt, and preferred stock ratings reflect Freddie Mac's pressured capital position in the face of higher operating losses. The risk-to-the-government rating measures Freddie Mac's "stand-alone" creditworthiness (i.e., its credit quality absent extraordinary government support).

" Higher credit expenses are the driver of net operating losses, as Freddie Mac is not immune to the weak housing markets," said Standard & Poor's credit analyst Victoria Wagner.

For a complete copy of S&P's news release, please contact
Jeff Sexton, New York, (1) 212-438-3448, jeff_sexton@standardandpoors.com

Analyst Contacts:
Victoria Wagner, New York (1) 212-438-7406
Daniel E Teclaw, New York (1) 212-438-8716