Royal Bank of Scotland (RBS) analysts said in a report released today that they disagree with the speculation that the redirection of the GSE fees to pay for non-mortgage related expenses makes a credit rating downgrade is likely.

"While this is a clear case of redirection, the GSEs do not have any standalone credit quality as continued operations are fully reliant on the U.S. Treasury," analysts said. "In addition, the redirection of the guarantee fees utilizes the GSEs in a way we have not really seen before, bringing them closer to the government."

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