The chairman of BlackRock Inc. sounded a cautionary note about the mortgage-backed securities market. "The de-leveraging going on right now"- the unloading of mortgage securities by hedge funds-could mean a relatively lean year for compensation, said Laurence D. Fink.

But the disruption will be only a temporary setback in what has been "a big success story for everyone," Mr. Fink said.

"I believe the market is pretty darned efficient, and we will see a resolution to some of these problems," he said.

Mr. Fink, who is also BlackRock's chief executive officer, spoke last week at a Bond Market Association dinner in his honor.

Though 1998 will not be as bountiful as past years, he said, he predicted "huge opportunities for the survivors on the Street."

Outstanding mortgage-backed securities, collateralized mortgage obligations, and asset-backed securities are valued at more than $3.4 trillion, he noted.

Mr. Fink was introduced by Leland Brendsel, chairman and chief executive officer of Freddie Mac.

Though many securities markets have been "disrupted and intimidated," Mr. Brendsell said, the market for securities backed by conventional mortgages "continues to perform well and flourishes."

Mr. Fink, who was given the association's distinguished service award, founded BlackRock in 1988. The company, now a unit of PNC Bank Corp., has more than $120 billion of assets under management for institutional and individual investors.

A distinguished service award was also given, posthumously, to Austin V. Koenen, who was deputy chief executive officer and head of investment banking at China International Capital Corp.

Mr. Koenen died in May. China International, created in 1995, was the first joint-venture investment bank formed with Chinese and foreign partners.

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Freddie Mac last week priced $3 billion of noncallable 10-year notes with a coupon of 5.125% as part of its Reference Note program. Freddie Mac said it will offer the notes monthly when market conditions are appropriate. The company said it may also reopen some previous note programs to more investors.

Freddie said that by moving from quarterly to monthly issuance it will bolster its investor base and enhance its borrowing program. Since Freddie began the program it has issued $13 billion of notes.

Thursday's note was priced at 82 basis points over the 10-year Treasury, said Edward I. O'Brien Jr., senior vice president and manager of federal agency trading at Prudential Securities.

The pricing was slightly higher than anticipated, he said, noting that the price talk started at 72 basis points. "It seems like it's found some stability" at 80 basis points, Mr. O'Brien said.

Mr. O'Brien noted that there is "a tremendous amount of pressure on agency spreads because of wider swap spreads, wider spreads in the corporate market, and problems in general with spreads throughout the fixed-income market."

U.S. investors showed the most interest in the issue, he said, adding that a decline in the dollar probably hurt the sale. Prudential did not see any international demand, he said.

Mr. O'Brien said that monthly issuance would help to build liquidity and strengthen the program as soon as the market stabilizes.

Goldman Sachs & Co., Merrill Lynch & Co., and J.P. Morgan & Co. were the lead managers.

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