Fitch: Countrywide outlook stable

Fitch Ratings said it has affirmed the A senior unsecured rating of Countrywide Financial Corp. and Countrywide Home Loans Inc. and has revised the outlook to stable from negative, where it was placed on May 20, 2003.

Ratings affirmed include Countrywide Financial's convertible debentures at A and preferred stock at A-.

Fitch said the outlook revision reflects significant improvements to Countrywide Financial's valuation, management and corporate governance surrounding mortgage servicing rights (MSR), enhancements to its capital structure through growth in retained earnings and capital-raising initiatives undertaken during 2003, and aggressive expansion in deposits at its banking subsidiary, which adds a degree of additional funding diversity.

The agency said future rating actions will be based upon Countrywide Financial's success in maintaining an MSR valuation, hedging and control structure consistent with industry best practices, stable performance metrics, and appropriate levels of capital. In addition, Fitch believes that Countrywide Financial will evaluate and enhance its contingent liquidity funding framework.

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