Fannie Mae has priced its Connecticut Avenue Securities (CAS), the series 2016-C04, at tighter spreads to its previous deal, completed in April.

CAS is the primary way that Fannie Mae offloads the credit risk on mortgages that it insures to capital markets investors, reducing taxpayer exposure to any losses. The notes are general obligations of the company, but are linked to the performance of a pool of mortgages that Fannie Mae acquired and subsequently securitized. Should borrowers fall behind on payments or default, the government-sponsored enterprise could write down the value of CAS notes.

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