Freddie Mac, responding to investor demand for liquidity and yield when the supply of Treasury securities is waning, will begin offering global noncallable debt next month.

The McLean, Va.-based company that buys mortgages from lenders and securitizes the loans said that it will issue the noncallable debt as bullet securities each quarter. The issues, called reference notes, will be offered in a minimum size of $4 billion.

Freddie Mac is tapping the overseas market after its main rival in the secondary market for mortgages, Fannie Mae, began an intermediate-term, noncallable note program in January. Many investors have bought Fannie's so-called benchmark notes as a proxy for government debt.

Fannie has brought three $4 billion deals to market to build a yield curve: a five-year issue in January, a 10-year issue in February, and a three-year issue in March. Fannie also reopened the February issue for an additional $750 million.

Like Fannie's larger program, Freddie's will help "focus the attention of a lot of larger accounts on the agency market in general," said Edward I. O'Brien Jr., manager of federal agency trading at Prudential Securities.

He said that the demand for the issues would ultimately reduce the gap between yields on Treasuries and on agency issues.

Last year Freddie sold almost $40 billion of debt with maturities longer than one year and expects to offer a similar amount in 1998. Last year Freddie issued close to $15 billion of bullet securities with five- to 10- year maturities.

"Our interest initially is going to be more in the five- and 10-year sector of the yield curve," said Victoria Whitenton, vice president and treasurer for corporate finance at Freddie Mac. "This will be a great way to issue the fixed-rate funding that we need" and to access investors Freddie has not been able to reach, she added.

Freddie expects that active money managers looking for good credit quality and a liquid secondary market will participate in the bullet financing program, Ms. Whitenton said.

Gary E. Pzego, vice president and portfolio manager for Keystone Investments Management Co., owned by First Union, bought some of Fannie Mae's global securities "to try to earn a greater spread than Treasuries," he said. He said 2% to 3% of his portfolio is in global agency securities and that he is considering buying Freddie Mac securities.

"People are hungry for extra yield, but they're also concerned about extra liquidity. Liquidity is very, very important to accounts these days," said an agency trader on Wall Street.

Observers expect overseas interest in these types of programs to remain strong.

A portfolio manager in London for a major broker-dealer said that he participated in the Fannie program but had not heard from salespeople about the Freddie program. He expects to see good demand for Freddie's issues from central banks, insurance companies, and traditional money managers, he said.

"Between callable debt and bullet debt, it's far easier to sell bullet debt into European accounts," he said.

Goldman, Sachs & Co., Merrill Lynch & Co., and Salomon Smith Barney are the joint lead managers for the first issue.

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