Another week, another group weighing in on the road ahead for both Fannie Mae (FNM) and Freddie Mac (FRE). In this case, Fitch Ratings became the last of the three major rating agencies to drop its ratings on the preferred shares on both GSEs; both Moody's Investors Service and Standard & Poor's Ratings Services did the same late last month. Fitch cut its ratings on preferred shares at both mortgage finance giants to one notch above junk, at BBB-, citing a lack of financial flexibility. "While Fitch believes capital at both firms remains adequate for the intermediate term, the capital markets have significantly discounted the value of both common and preferred stocks, effectively limiting any potential issuance from either GSE," analysts at the agency said in a press statement. "The lack of reliable access to the public equity markets appears to be more permanent than Fitch had anticipated." While the agency said it doesn't expect either company to post a profit this year or next, and said that some form of government support was likely, Fitch also ntoed that both retain "adequate access to debt markets." Underscoring that ready access, Freddie Mac sold $1 billion each of 3-month and 6-month bills early Tuesday. While demand was noticeably weaker -- the bid-to-cover on the 3-mos. notes declined to 3.73 from 3.95 last week, while the the six-month bills saw a ratio of 2.67 compared with 3.42 one week earlier -- it clearly wasn't outside of what most market participants would consider to be normal. Lynn Adler at Reuters also noted that Freddie also sold $1 billion of five-year notes Tuesday in a reopening of an existing issue that is now $4 billion in size. The offering drew more than 3.5 bids per note and was auctioned off just shy of 96 basis points above Treasuries. In other words, while agencies and others continue to fret over share price declines, the GSEs continue about their core business largely unaffected. Noting the relatively benign debt market environment for both GSEs, more than a few analysts have suggested in the past week that fears of nationalization at both Fannie and Freddie are largely overblown. Disclosure: The author was long FRE when this story was published; indirect holdings may exist via mutual fund investments, as well. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.