After completing a record breaking $10 billion sale of benchmark debt in January, Fannie Mae broke its own record last week with a three-tier sale of its benchmark bonds and notes.

The $11.5 billion sale also marked the debut of Fannie Mae's new Benchmark Automated Syndication System (BASS), a computerized system that gives dealers the ability to link directly with Fannie Mae to get near real-time information regarding the sale (MBSL 7/31/00).

The sale included three different maturity notes, including a reopening of two previous issues. It included a $5 billion sale of new two-year notes, a $4 billion reopening of June 2010 10-year notes and a $2.5 billion reopening of May 2030 30-year bonds.

"The sale went extremely well," said John The Losen, vice president of debt marketing for Fannie Mae. "The three maturities were heavily oversubscribed."

The two-year notes held a 6.75% coupon and priced at 99.873 at a spread of 57.5 basis point over. The yield was 6.816%.

Benchmark 10-year 7.125% notes reopened at a price of 100.490 at a spread of 106.5 basis point over, yielding 7.053%.

Thirty-year 7.25% coupon bonds reopened at a price of 103.476, yielding 6.97% at a spread of 125.5 basis points over.

"The two-year and 10-year went extremely well, maybe a half of a basis point to the tight side of price talk," said Art Frank, director of mortgage-backed securities research at Nomura Securities. "Price talk had initially been 124 on the 30-year and it went at 125.5. Clearly they went at significantly wider spreads than they would have last January or February, but they could not have gotten $11.5 billion off in such an orderly fashion at the height of the [Gary] Gensler hysteria form late March through early May."

"They performed extremely well in the secondary market and we were very gratified that in what is traditionally a pretty slow time in the markets - summer vacation time - that there was such intense investor focus by such a broad range of investors both domestically and globally on these transactions," added The Losen.

U.S. investors took in 82% of the 10-year and 30-year and 53% of the two-year. European investors took in 6% of both the 10- and 30- years and 23% of the two-year. Asian investors bought 10% of each of the three issues.

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