The delisting of US-government sponsored mortgage enterprises Fannie Mae and Freddie Mac may lead China to modify its holding of the two companies’ mortgage bonds, but is unlikely to lead to a wide-scale selloff, reported state media. China’s holdings in Fannie and Freddie amount to between US$300 billion and US$400 billion, making it the largest holder of the two companies’ mortgage bonds. These holdings could be damaged following the Federal Housing Finance Agency’s (FHFA) mandate issued Wednesday that instructed Fannie and Freddie to delist common and preferred stock from all exchanges. However, FHFA acting director Edward J. DeMarco stated that the decision to delist in no way reflects the mortgage giants’ present or future economic performance.
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