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by CLSA [More Info]
The US Treasury and the Federal Reserve have announced emergency plans to support the troubled Freddie Mac and Fannie Mae to boost confidence in US’s mortgage finance giants. Emergency cash and extension of credit lines will be offered to both entities, and that the US Treasury may step in and take equity stakes in the entities if necessary. We believe these moves underpin the US government’s strong support for the two mortgage financiers, and thus believe risks of credit losses on Freddie Mac and Fannie Mae bonds should be well contained. Owing to limited disclosure, we are only able to estimate the exposure based on the maturity profile and currency exposure of investments at individual banks. Our estimates suggest the exposure in bonds issued by Freddie Mac and Fannie Mae at most banks is between 0-1% of total assets, except for BOC where it is estimated to make up around 2.6% of total assets respectively.
Access : For Public
Pages : 2
Category : Markets
Cost :
Free
Date Published : 2008-07-16
