Fannie Mae raised $7 billion in its largest individual sale of senior debt Wednesday, after a federal takeover of the government-sponsored enterprise led to a record drop in yields relative to benchmarks.

The two-year benchmark notes were priced to yield 2.896%, or 70 basis points more than Treasuries of similar maturity. This was the lowest spread in a two-year sale by Fannie since June. Also Wednesday, the GSE sold $2 billion of short-term bills at lower yield spreads in a weekly auction.

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