The severity of the US mortgage crisis was underscored yesterday as Freddie Mac, one of two government-sponsored enterprises that underpin the US housing market, paid its highest risk premium yet on a five-year debt issue to raise $3bn.

The sale of the Freddie bonds yielding 113 basis points more than comparable Treasuries came less then a week after Freddie's rival, Fannie Mae, paid a record 122.5bp more than Treasuries to lure investors to a three-year issue that raised $3.5bn.