Fitch downgrades Fannie Mae, Freddie Mac after US rating cut
2023.08.02 19:00
© Reuters. A man walks through a plaza at the new Fannie Mae headquarters in Washington, U.S., October 4, 2022. REUTERS/Kevin Lamarque
(Reuters) – Ratings agency Fitch on Wednesday downgraded U.S. mortgage finance giants Fannie Mae and Freddie Mac (OTC:) Long-Term Issuer Default Ratings (IDR) and senior unsecured debt ratings to ‘AA+’ from ‘AAA’ after the U.S. rating downgrade on Tuesday.
The agency said the cut was a result of Tuesday’s downgrade and was “not being driven by fundamental credit, capital or liquidity deterioration at firms”.
In late May, Fitch had placed the ratings of the mortgage finance giants on watch for a possible downgrade as U.S. lawmakers’ negotiations to raise the government’s debt ceiling dragged on without a resolution.
The move to cut U.S ratings on Tuesday drew an angry response from the White House and surprised investors, coming despite the resolution of the debt ceiling crisis two months ago.
