Freddie Mac sold EURO5 billion of five-year bonds to the European market last week (see MBSL 11/27/00), fulfilling the second level of its long-term plan to sell EURO20 billion onto the Euro MTS trading platform each year.
The bonds priced at a yield of approximately 5.3%, sources said, or 32 basis points more than French government five-year notes and 40.2 basis points more than German five-year notes.
"We're very pleased with the distribution" of buyers geographically, said Louise Herrle, the treasurer at the GSE. "From an investor viewpoint it's priced at the attractive end of the range" of presale price talk, she added.
About 20% of the bonds were sold to investors in Asia, including Japan, and about 15% to buyers in the U.S. The remainder was sold to European investors, Herrle said.
The GSE is working toward a full yield curve of issuance in the Euro market, so the next sale may be in notes with shorter maturities, or possibly a combination of shorter maturity debt and more of an existing security, according to Herrle.
More than half of the 270 investors that bought Freddie's first Euro Reference Note earlier this year had never purchased agency securities before, so the GSE is hoping to continue to tap a wider global audience.