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""Fitch Ratings"":http://www.fitchratings.com has affirmed the long-term Issuer Default Ratings (IDRs) of ""Fannie Mae"":http://www.fanniemae.com and ""Freddie Mac"":http://www.freddiemac.com at 'AAA', citing the federal government's implicit guarantee that the mortgage giants will remain solvent and its explicit outlays of monetary support as key for the agency's decision. Fitch says the rating outlook for the two GSEs remains ""stable.""
The agency's actions follow its affirmation of the ‘AAA' IDR and stable outlook on the U.S. government. Fitch notes[IMAGE] [COLUMN_BREAK]
that the ratings of Fannie Mae and Freddie Mac are linked to the U.S. sovereign rating.
""Fitch believes continued material credit expenses from each firm's legacy books of business and their quarterly dividend obligation to the U.S. Treasury makes it highly likely that one or both firms will continue to rely on capital support from the U.S. Treasury for the foreseeable future,"" Fitch said in a statement.
The agency cited a report from the administration issued in February, which said the government is committed to ensuring that Fannie Mae and Freddie Mac 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 their obligations.
""Fitch believes such a definitive statement by the administration confirms its on-going support to Fannie and Freddie, and as a result, Fitch anticipates maintaining the equalization of the long- and short-term IDRs and rating outlooks of these firms with that of the U.S. sovereign,"" the ratings agency said.
