Asian investors have flocked to Fannie Mae's noncallable debt offerings in recent weeks, driven by low interest rates in Asia and the newfound affordability of dollar-denominated bonds.

High credit quality, liquidity, and the notes' spread over Treasuries are attracting foreign investors to Fannie's notes, said John W. The Losen, vice president for debt marketing in Fannie Mae's treasurer's office.

Asian investors have been comfortable with Fannie's program because of the company's track record and because of the clarity of its disclosures about the securities and their prices, Mr. The Losen said.

Of the $40.25 billion of so-called benchmark notes issued to date, $6.84 billion-about one-sixth-have gone to Asian investors, he said. Non-Japanese Asian investors have outnumbered Japanese investors by more than 2-to-1.

Fannie Mae's forays overseas this year have broadened the investor base for its debt at a time when investors' aversion to credit risk has jacked up yields.

"This is not a great time to issue debt," said Nancy J. Kimelman, chief economist for Thompson Global Markets. Fannie says it is also making progress in establishing its own yield curve through the benchmark note issues.

Economic conditions in Asia make the U.S. agency debt look attractive.

International investors would rather buy something that has "some credit spread but not too much credit risk," Ms. Kimelman said. And the agency debt, because it is noncallable, fills the bill. Agency notes also have higher yields than Treasuries, she said.

Sources on Wall Street also said that the decline in the dollar from its recent highs had spurred Asian and European investor demand.

"When the dollar was very strong, U.S. securities were simply too expensive for overseas investors," Ms. Kimelman said. Now these notes are slightly more affordable, and an uptick in U.S. interest rates in the last couple of weeks has made the pricing even more attractive, she said.

Though this is a good time for investors, there is a downside for issuers of debt in this environment: The cost is high. Despite low interest rates, Fannie and Freddie must sell debt at a fairly wide spread to Treasuries, she said.

International investors were active buyers of Fannie's latest note issue, a $3 billion, five-year security that settled Monday. Thirteen percent went to Japanese investors, the strongest Japanese participation Fannie Mae has seen to date; 30% to non-Japanese Asian investors; 33% to domestic investors; 21% to European investors; and 3% to others, said Mr. The Losen.

In mid-October, Fannie Mae also brought to market a three-year note, which had 45% participation by Asian investors, 39% by non-Japanese Asian buyers and 6% by Japanese investors.

Japanese and Chinese investors, primarily central banks, have been big buyers of Fannie Mae's last two issues, said Edward I. O'Brien Jr., senior vice president and manager of federal agency trading at Prudential Securities.

"Fannie has targeted the international investor very aggressively," he said. Mr. The Losen said that official institutions and banks in Asia have preferred to participate in buying the three- and five-year maturities.

James A. Johnson, chairman and CEO of Fannie Mae; Franklin D. Raines, his designated successor; and other top Fannie executives also bolstered Asians' interest during a mid-October visit to Japan, China, and Hong Kong.

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