Bank of China Bothered by Fannie and Freddie Mess?

Chinese state media are reporting one of China’s largest banks “may” own $20 billion worth of debt in the United States’ gravely troubled lending giants Fannie May and Freddie Mac:

The Freddie Mac and Fannie Mae investments would amount to about 2.6 percent of total assets at , the nation’s third-biggest, CLSA analysts said yesterday in a note to clients. That compares with 0.09 percent at larger Industrial and Commercial Ltd (ICBC), they said.

ICBC may have $1 billion of securities linked to the two beleaguered US home loan companies, while China Construction Bank Corp, the second largest, may have $7 billion of such holdings, according to the report. China CITIC Bank Co may own $1.4 billion of agency debt, CLSA said.

Fannie and Freddie were recently the beneficiaries of an unprecedented government bail-out plan.

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