Their combined debt will exceed that of the Treasury by 2004 attheir current pace.In answer to questions about the safety of theirfinancial operations, the two companies agreed to severalconcessions. First, they will undergo regular review by debt raterssuch as Moody's Investor Service Inc. or Standard & Poor's, andpublicly report the results of risk assessments. They also agreedto create and conduct stress tests of their operations and issuesubordinated debt to raise the level of capital in theirportfolios. This would provide insurance in case of an abruptmarket collapse.

Currently, the two companies enjoy the implied backing of theFederal government, which is one reason their debt is ratedtriple-A. The new subordinated debt would not have that benefit,but be rated like any other debt. This would give investors moreinsight into the companies' credit quality, one of the reasons theagreement was welcomed on Wall Street. Both companies' stocks wentup to 52-week highs before receding from the peaks, still betterthan they started.

One analyst says the issue of financial safety will reappear, astheir debt is on track to reach $8 billion by 2010, according to astudy by Goldman Sachs.