S&P Downgrades Fannie, Freddie

NEW YORK, Aug. 9 (Xinhua) -- Rating agency Standard & Poor's on Monday downgraded both Fannie Mae and Freddie Mac from AAA to AA+.

The move came just two days after S&P's historic downgrade of U.S. credit rating. The rating agency also cut several other crucial financial institutions in U.S. financial system, including he Depository Trust Co. National Securities Clearing Corp., Fixed Income Clearing Corp. and the Options Clearing Corp. All of them were cut to AA+ from AAA.

S&P said it is looking at key sectors that are linked to the U.S. debt, and will announce "shortly" how those ratings might be affected, implying there might be more downgrade under way.

Fannie Mae and Freddie Mac, which were taken over by the government in 2008, fuel home sales by purchasing mortgages from banks. The downgrade of U.S. credit rating would affect the treasury bonds yield which would further affect the mortgage rates.