Risk premiums on debt securities issued by Fannie Mae and Freddie Mac took a turn for the worse Thursday as investors sold on continued uncertainty about the fate of the government-sponsored enterprises.

After a brief period of gradual improvement, spreads over comparable Treasury yields reversed course on a bevy of negative news this week.

On Monday, Fannie posted a record loss of $29 billion for the third quarter. On Wednesday, Treasury Secretary Henry Paulson said the government was abandoning its plan to use $700 billion allocated by Congress to buy troubled bank assets.

"Investors are going back to all these concerns," said Mark Noble, the head of the agency desk at MF Global Ltd. "There is no stability in the marketplace."

A spate of selling by foreign investors, especially in three-year notes, pushed the shorter notes to wider levels Thursday. Most of the buyers were domestic investors. "But the buying has been mostly on the front end, and demand for debt that matures in 18 months and under," Mr. Noble said. That also is the main reason Fannie and Freddie have issued most of their debt as short-term bills recently.

In its third-quarter filing, Fannie said it has "experienced reduced demand for our debt obligations from some of our historical sources of that demand, particularly in international markets." This reduction in demand has made it difficult "to issue debt securities with maturities greater than one year."

This bleak outlook on the ability to raise capital through long-term bonds worried investors.

On Thursday risk premiums on longer notes were weakened by 5 to 14 basis points. The spread for Fannie's two-year benchmark note over comparative Treasury yields widened 7.5 basis points, to 128 basis points.

The spread for Freddie's 4.125% note due 2013 narrowed by 13.5 basis points, to 131 basis points, according to TradeWeb Markets LLC.

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