Fannie Mae said Monday that it plans to sell five-year benchmark notes today in its first offering since September of a new issue that will mature in more than a year.
The amount of debt has not been determined, the government-sponsored enterprise said. It raised $2 billion last month.
Yields on the long-term debt of Fannie, Freddie Mac, and the Federal Home Loan Bank System have been declining against benchmark rates as a result of the Federal Reserve Board's plan to buy $100 billion of agency debt. The Fed is seeking to lower financing costs for Fannie and Freddie, the largest owners of mortgage bonds, to help lower home loan rates.
Agency debt spreads surged to records starting in October as the United States and other countries announced plans to guarantee bank debt, creating competing investments with government support. Spreads on Fannie's five-year debt over Treasuries of similar maturity have fallen 54 basis points since Nov. 20, to 105 basis points.
Fannie's benchmark notes are its largest type of debt issue, with a minimum size of $3 billion.
Barclays PLC, Citigroup Inc., and Goldman Sachs Group Inc. are managing today's sale.
Last month Fannie sold $1 billion of five-year notes at a price offering yields about 1.32 percentage points more than Treasuries of similar maturity.