NEW YORK -- Debt offerings by the Federal National Mortgage Association this year are likely to match the record $30 billion in 1991, said Steve Van Order, Fannie Mae's director of long-term funding.

"Exceeding $30 billion is tough, but something in the ball park is a possibility," he said in an interview last week. "We're on track" with 1991, he added.

So far this year, Fannie Mae has issued $20 billion in medium-term notes and 5-year to 10-year debentures.

Stimulus for Liquidity

Its latest $1 billion offering of "step-up" coupon medium-term notes on Aug. 5 was the largest such U.S. issue to date.

"We're not sure if $1 billion deals will be a regular thing," Mr. Van Order said. The agency's officials hope the latest deal "stimulates liquidity," he added.

The deal brought to $3.7 billion the total amount of step-up coupon issues since Fannie Mae introduced them in May.

The notes due Aug. 19, 1997, were priced at par via Merrill Lynch & Co. to yield 4.75%.

After one year, the yield steps up to 6.35% but also becomes callable with 30 days' notice.

"We need the flexibility to retire debt when our mortgages prepay," Mr. Van Order said. "It keeps our funding matched and results in less volatile earnings," he said.

"If we issued debt that was too long, then we'd have high-coupon debt on our books. If the debt is too short and mortgages didn't prepay, we'd need to replace the debt with higher-cost debt," Mr. Van Order said.

Test for Novel Structures

He said Fannie Mae's medium-term note program was designed to test novel structures such as the step-up notes in offerings of $150 million to $250 million via corporate underwritters. About 85% of the notes are sold in the United States.

The agency's debenture offerings average $400 million to $500 million and are sold through its 48-member agency selling group. About 70% of these go to U.S. investors.

Investors for both medium-term notes and debentures include commercial banks, state and local governments, and investment advisers.

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