WASHINGTON - Fannie Mae on Thursday priced $1.5 billion of 10-year subordinated Benchmark notes, its first-ever issue of Benchmark subordinated debt.

The notes, which settle on Feb. 1, yield 6.293% and come in at a 98-basis-point spread over the August 2000 10-year Treasury notes and 22 basis points over Fannie's 6.625% Benchmark notes issued Nov. 15.

Subordinated debt is paid out only after other debt with a higher claim has been disbursed. The subordinated issue is the result of a voluntary agreement reached in October between Fannie and Rep. Richard H. Baker. The Louisiana Republican had criticized both Fannie and Freddie Mac over their potential risk to taxpayers and had advocated tightening regulation of the government-sponsored enterprises.

Freddie also plans to issue subordinated debt. Goldman, Sachs & Co., Morgan Stanley Dean Witter & Co, and Salomon Smith Barney Inc. are the joint lead managers. The co-managers include Bear, Stearns & Co.; Blaylock Partners; Credit Suisse First Boston; Lehman Brothers; Merrill Lynch & Co.; and J.P. Morgan Securities.

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