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Two leading U.S. mortgage lenders have had their preferred stock ratings downgraded to ¡°non-investment¡± level. Moody¡¯s, a global credit rating agency, last week degraded preferred stock ratings of Fannie Mae and Freddie Mac from ¡°A1¡± to ¡°Baa3¡±.
But the agency maintained the long-term bond ratings of the two lenders at ¡°AAA,¡± as the U.S. government is expected to support bonds in emergency cases, whereas stock losses will not be covered -- even if they go bankrupt and became nationalized. The two troubled lenders saw their stock prices tumble a whopping 95 percent over the past year.
Central banks and private financial institutions around the world were major investors in the bonds. The Bank of Korea, for example, reportedly holds senior bonds worth US$37 billion. A BOK official said, ¡°The U.S. government does not want this problem to become a global issue. Even in the worst-case scenario, senior bond holders can retrieve both principal and interest.¡±
(englishnews@chosun.com )
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