Moody's: Fannie More Likely To Need Bail-Out
Translating actions taken by credit rating services can be as tough as those by the Fed. So lets try to make sense of todays downgrade of Fannie Mae by Moody's Investors Service. "Moody's Bank Financial Strength Rating measures the likelihood that a financial institution will require financial assistance from third parties, such as the government or shareholders."
That rating was downgraded after a review started last year. The firm doesn't see FNMs situation clearing up this year. "Moody's believes that Fannie Mae is actively working towards resolving all issues related to the accounting investigation, but in the rating agency's opinion complete remediation will take time, and likely not occur until 2006."
UPDATE: FNMs' regulator OFHEO, "will not be releasing the capital classification at this time as Fannie Mae continues to provide OFHEO with information related to the company's accounting and controls that may affect its capital classification."Moody's Reg. Req.