Fannie Mae Announces Monthly Calendar for Issuance of Bullet Benchmark Securities Spanning Yield Curve.

WASHINGTON--(BUSINESS WIRE)--Oct. 21, 1999--

Fannie Mae (FNM/NYSE), the nation's largest source of financing for home mortgages, today announced a calendar for its year 2000 issues of Benchmark Notes and Bonds.

For all of the stated maturities included in the calendar, Fannie Mae has scheduled announcement, pricing, and settlement dates, providing unprecedented definition and organization with respect to its issuance intentions in noncallable Benchmark securities.

The company said that the calendar will provide a greater opportunity for market participants to develop advance strategies for incorporating bullet Benchmark securities into their investment portfolios as well as their trading, hedging, duration management, and financing activities.

"Fannie Mae's commitment to issue Benchmark Notes and Bonds across the yield curve according to a fixed schedule starting in 2000 will provide investors around the world with the knowledge they need to plan ahead and take full advantage of these proven, highly liquid securities. In particular, we believe this calendar will help facilitate a deeper term repo market for Benchmark Notes and Bonds," said Linda K. Knight, Fannie Mae's senior vice president and treasurer.

In announcing its calendar, Fannie Mae also set a goal of achieving outstanding issue sizes, including reopenings, of $6 - $8 billion for various maturity Benchmark Notes and $4 - $6 billion for Benchmark Bonds.

The company said that depending on the specific issue, size of reopening and market conditions, it could employ the Dutch auction mechanism to reopen Benchmark securities in addition to the traditional syndicated method employed in the past.

Fannie Mae said it will issue five-year bullet Benchmark Notes securities five times in 2000, in the months of February, May, July, September, and December. Ten-year bullet Benchmark Notes also will be issued five times next year, in January, April, June, August, and November.

These will be the only months in which these respective maturities will be brought to market, either as new issues or reopenings.

On the short end of the yield curve, Fannie Mae said that it would issue either two-year or three-year Benchmark Notes in four specified months of the year - January, April, August and October - either as new issues or reopenings of existing issues.

The determination of which maturity will be issued in these designated months will be a function of investor demand, portfolio funding needs and market conditions.

Fannie Mae also committed to bring to market at least two seven-year Benchmark Notes offerings in the months of March and October and two 30-year Benchmark Bonds in May and November.

These maturities will be offered either as new issues or as reopenings.

Fannie Mae could potentially issue additional two-, three-, seven-, or thirty-year bullet Benchmark securities in other months to meet investor demand, coinciding with the company's funding needs.

In a manner similar to the U.S. Treasury, Fannie Mae will announce bullet Benchmark issues one week prior to the pricing date. The company noted that it is possible that in any given month, Fannie Mae could come to market with additional new issues or reopenings in maturities not identified on the calendar.

As part of the process of encouraging the development of a more active term repo market in bullet Benchmark securities, Fannie Mae will commence accepting Benchmark Notes and Bonds as collateral for reverse repurchase transactions conducted in conjunction with the corporation's liquidity management activities.

The calendar and this reverse repurchase initiative are expected to improve financing levels for Benchmark investors while increasing the depth of overnight and term repo markets for bullet Benchmark securities.

"Release of this calendar marks an important milestone in the evolution of bullet Benchmark securities. The new calendar adds vital and specific information for investors in the U.S. and internationally. It reinforces our strong commitment to providing market participants with a variety of maturities in high credit quality, extremely liquid securities and will allow Fannie Mae to maintain a current and actively traded yield curve in bullet Benchmark securities," Knight said.

To date, Fannie Mae has issued $94 billion in bullet Benchmark securities since inception of the program in January 1998. Knight estimated that Fannie Mae will issue in excess of $50 billion in noncallable Benchmark securities in 2000.

The detailed Fannie Mae Year 2000 Benchmark Notes and Bonds Calendar, with scheduled announcement, pricing, and settlement dates, is attached as Exhibit A. It is also available via http://www.fanniemae.com.

Fannie Mae said that the following ten securities firms would comprise the core Benchmark Securities Dealer group in the year 2000. These firms are:

-- ABN-AMRO Incorporated

-- Bear Stearns & Co. Inc.

-- Credit Suisse First Boston Corporation

-- Goldman, Sachs & Co.

-- HSBC Securities (USA), Inc.

-- J.P. Morgan Securities Inc.

-- Lehman Brothers Inc.

-- Merrill Lynch Pierce, Fenner & Smith Incorporated

-- Morgan Stanley & Co. Incorporated

-- Salomon Smith Barney Inc.

The lead managers for all Benchmark Notes and Bonds transactions will be selected from this core group of dealers. Goldman Sachs, Merrill Lynch and Morgan Stanley have been selected by Fannie Mae as joint lead managers for the first transactions implementing the Benchmark Securities calendar, to be priced in January 2000.

Fannie Mae is a New York Stock Exchange company and the largest non-bank financial services company in the world. It operates pursuant to a federal charter and is the nation's largest source of financing for home mortgages. Over the past 30 years, Fannie Mae has provided nearly $2.5 trillion of mortgage financing for over 30 million families. More information about Fannie Mae can be found on the Internet at http://www.fanniemae.com.

Style Usage: Fannie Mae's Board of Directors has authorized the company to operate as "Fannie Mae," and the company's stock is now listed on the NYSE as "Fannie Mae." In order to facilitate clarity and avoid confusion, news organizations are asked to refer to the company exclusively as "Fannie Mae."