Bank of China (BOC), China's third biggest state-owned bank, may hold US$20 billion worth of debts issued by Fannie Mae and Freddie Mac, the Oriental Morning Post reported Thursday, citing a report of CLSA Ltd.

CLSA analysts said that the US$20 billion accounts for 2.6% of BOC's total assets and represents two thirds of total such holdings of the six largest Chinese banks.

Bank of China spokesman Wang Zhaowen hasn't made any comment concerning this matter yet.

According to the CLSA report, China's largest bank - Industrial and Commercial Bank of China (ICBC), may have US$1 billion of such holdings, which accounts for 0.09% of its total assets.

China Construction Bank (CCB) and China CITIC Bank may own US$7 billion and US$1.4 billion of such debts respectively, CLSA said in the repot.

Next month, ICBC and CCB will release their first-half earnings reports, which contain information about their holdings of Fannie and Freddie-issued debts.

China Life Insurance Company and Ping An Insurance Company of China have both announced that they don't have any such holdings.

Fannie Mae and Freddie Mac are both mortgage finance companies that are sponsored by the U.S. government. They suffered great losses during the subprime crisis and are facing even bigger problems due to their incapability to raise sufficient capital. These two companies are now under spotlight on the argument whether or not the U.S. government should bail them out.

For more details, please read the full story in Chinese (http://www.dfdaily.com/node2/node27/node119/userobject1ai102737.shtml).

(China.org.cn July 17, 2008)