Freddie, Fannie CDS edge tighter after NYT report

NEW YORK (Reuters) - Credit insurance costs on Fannie Mae and Freddie Mac fell slightly on Friday after the New York Times reported that the U.S. government is considering taking over the mortgage finance companies if their funding problems worsen.

The cost of protecting Freddie Mac's debt with credit default swaps for five years fell to 78 basis points, or $78,000 a year to protect $10 million of debt, down 1 basis point, while Fannie Mae's credit default swaps fell to 78 basis points, compared with 78.4 basis points at Thursday's close, according to data from Markit Intraday.

(Reporting by Dena Aubin; Editing by Theodore d'Afflisio)

(dena.aubin@thomsonreuters.com; +1-646-223-6325; Reuters Messaging: dena.aubin.reuters.com@reuters.net))