No U.S. rating risk yet from Fannie, Freddie: agencies

By John Parry

NEW YORK (Reuters) - Any U.S. government takeover of mortgage finance companies Fannie Mae and Freddie Mac would not likely trigger a downgrade of the United States' "AAA" sovereign credit rating, the three major rating agencies said on Friday.

All three said they saw no immediate threat to the U.S. sovereign rating, although one agency warned that a more generalized financial sector crisis could trigger a rethink.

Nikola Swann, a credit analyst with Standard & Poor's in Toronto, said a U.S. government takeover of the two mortgage finance giants alone would not precipitate a sovereign downgrade.

"Could that one change by itself cause a downgrade or negative outlook? The answer is 'no,'" said Swann.

He noted, however, that "if there is a broader financial sector problem ... that could be more serious and could mean a more serious evaluation of the rating."

Wider financial system problems could occur in a long and deep economic recession that substantially adds to the debt burden of the U.S. federal government, Swann added.

A Moody's Investors Service analyst said that any U.S. government takeover of the mortgage companies would not be likely to affect the United States' "AAA" rating.

"We think the U.S. government has quite a manageable level of debt and it has a strong balance sheet," Steven Hess, a New York-based Moody's analyst, said in an interview. Any shock to its balance sheet from Fannie and Freddie support would be manageable, he said.