Foreign holdings of US debt hit record high

WASHINGTON (AP) — Foreign demand for U.S. Treasury securities rose to a record level in May. China, the largest buyer of Treasury debt, increased its holdings for the second straight month.

The Treasury Department says total foreign holdings rose 1 percent to $5.26 trillion. It was the fifth straight monthly increase.

Demand for U.S. debt is rising largely because investors are worried about Europe's worsening debt crisis and its impact on the global economy. U.S. government debt is considered one of the safest investments.

The report suggests that foreign investors and governments, which are big buyers of U.S. debt, aren't worried about large U.S. budget deficits. Nor do they appear concerned about last year's downgrading of U.S. long-term credit by rating agency Standard & Poor's.

China increased its holdings 0.4 percent in May to $1.17 trillion. That followed a 1.8 percent rise in April and 1 percent drop in March.

Japan, the second-largest buyer of Treasury debt, boosted its holdings 1.4 percent to $1.1 trillion. Brazil, the third-largest holder, cut its holdings 1 percent to $243.4 billion. And Britain increased its ownership of U.S. debt 18.6 percent to $161.1 billion.