The delisting of Fannie Mae and Freddie Mac, the largest US home funding companies, on US securities exchanges may force China, the largest holder of their mortgage bonds, to adjust its holdings, but large-scale selling is unlikely, said analysts.

And China should demand more active measures from the US side to ensure the security of its dollar assets, said Lei Yanhua, a researcher with the Chinese Academy of International Trade and Economic Cooperation affiliated to the Ministry of Commerce.

The Federal Housing Finance Agency (FHFA) on Wednesday ordered Fannie Mae and Freddie Mac, taken under government control in September 2008 during the financial crisis, to delist their common and preferred stock from the New York Stock Exchange (NYSE) and any other national securities exchange.

The decision does not reflect on either enterprises' current performance or future direction, nor other findings or on FHFA's role as a regulator, said Edward J. DeMarco, FHFA acting director.

But it could be damaging to Chinese institutions holding mortgage bonds of the two companies.

China was the largest foreign creditor of Fannie Mae and Freddie Mac, holding mortgage bonds worth between $300 billion to $400 billion even after the financial crisis erupted and worsened in 2008, less than 20 percent of China's official foreign exchange reserves, according to various unofficial estimates.

"Delisting would make the bonds less attractive to investors and affect their liquidity," said Dong Xian'an, chief macroeconomic analyst with Industrial Securities.

The toughest time has passed for the two companies and they are "too big to fail", said Lei Yanhua. But after the delisting, their new financing would lead to a decline in the prices of bonds held by China, he said.

Ding Zhijie, head of School of Banking and Finance at the University of International Business and Economics, also said bond value held by China is quite worrisome as market confidence may slide after the delisting and put downward pressure on the bond prices after the order was issued.

There are no indications that there will be any negative impact on the payment of interest due, given the huge quantity of such bonds China holds, but the nation would probably resort to short-term market transactions based on its judgment of the market situation, Dong said.

It is unlikely, however, that China will dump the bonds because it is still possible their prices will rise, said Huang Yiping, an economist with the China Center for Economic Research at Peking University.

"The US government would not give up on these two institutions whose housing mortgage loans account for about half of the nation's total," he said. "It would be inadvisable to sell the bonds on a large scale when the prices already hit the trough," he said.