Fannie Mae said it would price a 30-year bond of at least $1 billion Thursday as part of its Benchmark program.
The company said the offering is designed to give "current holders of our smaller, less liquid, noncallable debt securities at the long end of the yield curve" a "liquid, high-credit-quality, long-duration security" at a time when Treasury issuance is declining.
This is to be the second 30-year offering by the secondary mortgage market company. In May 1999, it priced a $1.5 billion deal that has since been reopened three times and now totals $4.25 billion, a spokesman said.
Fannie also plans to price a $3 billion, five-year note on Thursday.
Through last Thursday, Fannie's five-year notes were trading at about 64 basis points above the five-year Treasury security, and its 30-year bond was trading at about 97 basis points more than the government's long bond, said Edward I. O'Brien Jr., senior vice president for federal agency trading at Prudential Securities.
Bear Stearns & Co., Lehman Brothers, and Merrill Lynch & Co are co-lead managers of the five-year Benchmark issue and the cash offering of the 30-year Benchmark bonds.