Fannie Mae said it will start offering large issues of intermediate noncallable notes every quarter starting in January.

The company expects the new issues, called Fannie Mae Benchmark Notes, to be between $2 billion and $5 billion.

"Fannie Mae Benchmark Notes are designed to meet investor demand for securities of superior liquidity and credit quality. We expect that the regularity and size of these issues will establish Benchmark Notes as a viable trading and hedging tool, as well as an exceptional investment vehicle," said Timothy Howard, Fannie Mae's executive vice president and chief financial officer.

Fannie Mae said the Benchmark Notes will become its preferred method of noncallable debt issuance, superseding other distribution methods.

Fannie Mae selected Bear, Stearns & Co.; Credit Suisse First Boston; Deutsche Morgan Grenfell; Goldman, Sachs & Co.; J.P. Morgan & Co.; Lehman Brothers; Merrill Lynch & Co.; Morgan Stanley Dean Witter, and Salmon Smith Barney as book runners and co-managers of Benchmark Note transactions.

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