NEW YORK, NY - Standard & Poor's, the leading provider of independent research, indices and ratings, today assigned its first corporate governance score (CGS) to a US company, assigning a 'CGS-9.0' to Washington, DC-based Federal National Mortgage Association (Fannie Mae, NYSE: FNM), the country's largest provider of housing finance, and America's second-largest company by assets. With its score of 9.0, Fannie Mae's governance practices are judged by Standard & Poor's to be at a very strong level on a global basis of comparison.

Standard & Poor's corporate governance scores reflect its assessment of a company's corporate governance practices and policies and the extent to which these serve the interests of the company's financial stakeholders, with an emphasis on shareholders' interests. A company receives an aggregate Corporate Governance Score, which is articulated by a scale from CGS-1 (lowest) to CGS-10 (highest). Standard & Poor's introduced Corporate Governance Scores in the US market in late 2002. It has been conducting corporate governance evaluations globally since 2000.

"This score marks an important development in bringing greater transparency about corporate governance to US investors," said Andrea Esposito, Managing Director for Governance Services at Standard & Poor's in New York. "In the wake of last year's governance breakdowns, investors are recognizing increasingly that corporate governance is an important risk factor, and are demanding higher governance standards and the ability to have a clearer understanding of the relative strengths and weakness of individual companies' governance practices. By being the first US company to publish its governance score from Standard & Poor's, Fannie Mae is not only demonstrating its own strong governance practices, but is also showing leadership in the US with regard to providing greater openness and disclosure about its corporate governance standards."

"Fannie Mae's high corporate governance score reflects governance practices that are consistently strong or very strong across each of our areas of analysis," said Dan Konigsburg, Associate Director for Governance Services at Standard & Poor's. "Fannie Mae manages its governance process capably and has demonstrated that external influences do not materially distort or negatively influence its governance vis-a-vis its financial stakeholders."

Fannie Mae scored strongly or very-strongly in each of the four areas Standard & Poor's reviews as part of the Corporate Governance Scoring process: ownership structure and influence; financial stakeholder rights and relations; financial transparency and information disclosure; and board structure and process. The company scored highest for its board structure and processes; it has a highly independent board, with strong and recently formalized leadership for its non-executives and notable strengths among its committees. In the area of financial disclosure, despite the company's historical exemption from registering and filing disclosures with the SEC, Fannie Mae's voluntary disclosures generally meet and in some cases exceed those of its SEC-registered peers.

Under ownership rights and stakeholder relations, the company's strengths include an unclassified board, a positive shareholder proposal policy, and shareholder-friendly provisions that allow owners to convene special shareholder meetings. Weaknesses include shareholders' inability to vote for the five Presidentially appointed directors given the company's unique corporate status as a government-sponsored entity.

Finally, Fannie Mae's ownership structure and influence was judged strong because, as a widely held company with small management and director shareholdings, conflicts of interest or undue influence from stakeholders were assessed as unlikely. The entire analytical process involved considerable interactive discussions with Fannie Mae's senior executive management and board directors.

Standard & Poor's CGS scores are comparable on a global basis, as they reflect the actual governance practices of companies, irrespective of law, securities and other regulations, and accounting requirements. Companies may choose to adopt governance practices that exceed those required by the SEC or the exchange, and this is reflected in the scores. Companies that contract Standard & Poor's to undertake a corporate governance evaluation make the determination whether or not to have Standard & Poor's make the score public.

The full analysis of Fannie Mae's corporate governance practices and additional information regarding corporate governance scores is available from Standard & Poor's Corporate Governance Services department in New York and London and on Standard & Poor's Web site, www.governance.standardandpoors.com. Standard & Poor's will hold a teleconference today at 10:00 a.m. EST to discuss the background to its corporate governance initiative and the new corporate governance score assigned to Fannie Mae. The entire call will last about 60 minutes. During the last 30 minutes of the call, participants will be able to ask questions directly about this topic. To participate, please dial: +1-484-630-6253. Confirmation Number: 4967395. PASSCODE: SANDP1. Please call at least 10 minutes before the scheduled start of the call to complete the pre-call registration process.

Standard & Poor's Governance Services works with investors, companies and their directors to evaluate objectively a company's corporate governance policies and practices. This analysis is made in the context of criteria that are globally relevant, but which also can accommodate local governance philosophies and conditions in individual jurisdictions. Leveraging the intellectual assets of Standard & Poor's global organization, and with regional representation in North America, Europe, Asia and Latin America, the firm is able to assess company governance structures and practices in diverse economic, market and cultural environments.

Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP), provides independent financial information, analytical services, and credit ratings to the world's financial markets. Among the company's many products are the S&P 500, the premier U.S. portfolio index, independent equity research on over 1200 US companies, and credit ratings on more than 220,000 securities and funds worldwide. With 5,000 employees located in 19 countries, Standard & Poor's is an integral part of the global financial infrastructure. For more information, visit www.standardandpoors.com.

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