Russia says happy to hold U.S. agency debt

By Gleb Bryanski

MOSCOW (Reuters) - Russia, a holder of about $100 billion (50 billion pounds) in U.S. agencies' debt, including securities of Fannie Mae and Freddie Mac, said on Saturday it was happy to hold the debt and had no immediate plans to reallocate.

"Debt obligations of Fannie Mae and Freddie Mac are de-facto not inferior to U.S. sovereign debt obligations in their credit quality and still have the highest credit rating necessary for the gold and forex reserves investment," the Finance Ministry said in a statement.

The Russian central bank, which holds $574 billion in gold and forex reserves, said in May it had about $100 billion invested in the securities of U.S. agencies at the end of 2007, with the majority in short-term paper.

Russia has bought the U.S. agency debt seeking to boost returns on the investment of its reserves, the world's third largest. The reserves also de-facto include Russia's two oil funds, where the country stashes its energy export revenues.

The debt issued by Fannie Mae and Freddie Mac soared on Friday after a New York Times report said the U.S. government was considering a takeover of the housing finance giants which face funding problems.

U.S. Treasury Secretary Henry Paulson later indicated a bailout was unlikely. Fannie Mae and Freddie Mac said that their finances were sufficiently sound to withstand the housing crisis.

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Paulson, who visited Russia last month, said the primary focus of the U.S. government was supporting Fannie and Freddie "in their current form as they carry out their important mission".