Derivatives traders treat Fannie, Freddie as if downgraded

07/9/2008 | Bloomberg

The largest credit-rating agencies in the world have given Fannie Mae and Freddie Mac Aaa ratings, but derivatives traders are treating the companies as if they should be downgraded by five levels. As credit losses increase and concerns that Fannie and Freddie do not have the capital needed to get through the housing slump, traders are finding little comfort in the government's implied guarantee of the firms' debt.

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