Norway’s Oil Fund Drops Fannie and Freddie

In general, current U.S. mortgage debt investments are souring for institutional investors. Last week, Fannie Mae and Freddie Mac mortgage bonds fell after the United States FHFA made clear changes in guidelines for a government-supported refinancing program. Refinancing risk is a major concern for bond investors, especially in today’s low yielding fixed-income markets. The institutional investor will lose out from the household’s gain in refinancing. Fannie Mae and Freddie Mac guarantee against default, not from prepayment loss.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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