 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Issuance Overview
Fannie Mae is the leader in the $12.0 trillion U.S. home mortgage market. We continue to further our housing mission by providing liquidity to the secondary mortgage market and promoting homeownership to low- and moderate-income families through our portfolio purchases of mortgage loans and our MBS issuance. To support the growth of our mortgage portfolio, Fannie Mae issues debt in the domestic and global capital markets. In order to manage the interest rate risk of the portfolio, a variety of debt securities in a wide range of maturities are issued.
Fannie Mae's Funding Philosophy
Fannie Mae takes a long-term approach to its funding strategy. This is because of Fannie Mae's continuous requirements for large amounts of funding to carry out its mission. We believe it is incumbent on us to work in the best interest of investors and not to issue opportunistically for short-term gain. We endeavor to structure debt products that match the needs of our portfolio to the interests of the market. When anticipating the issuance of any new debt security, Fannie Mae works diligently with its dealers to gauge demand for various types of securities and to ensure that there will be solid distribution of a security once it is brought to market. Fannie Mae has demonstrated a long-term commitment to investors in the way we bring issues to market and monitor their performance in the secondary market.
Fannie Mae's Status as an Issuer
Fannie Mae's debt obligations are treated as U.S. agency securities in the marketplace, which is just below U.S. Treasuries and above AAA corporate debt. This agency status is due in part to the creation and existence of the corporation pursuant to a federal law, the public mission that it serves. Fannie Mae's senior unsecured debt has been rated "AAA," "Aaa," and "AAA" respectively by Fitch, Inc., Moody's Investors Service, and Standard & Poor's. Fitch, Moody's, and Standard & Poor's rate Fannie Mae's short-term debt "F1+," "Prime-1" or "P-1," and "A-1+," respectively. Fannie Mae's debt securities are unsecured obligations of the corporation and are not backed by the full faith and credit of the U.S. Government.
Regulatory Treatment of Fannie Mae Debt Securities
Fannie Mae debt obligations receive favorable treatment from a regulatory perspective. It is because of our U.S. agency status in the market, high credit quality, and public mission as stated in the charter act under which we operate that our debt is afforded such favorable treatment. The charter act actually limits Fannie Mae's business to activities that provide support and stability to the secondary mortgage market, especially those activities that promote housing for low- and moderate- income families. Fannie Mae securities are "exempted securities" under the laws administered by the U.S. Securities and Exchange Commission to the same extent as U.S. Government obligations. Also, Fannie Mae debt qualifies for more liberal treatment than corporate debt under U.S. Federal statutes and regulations, and to a limited extent, foreign overseas statutes and regulations. Some of these statutes and regulations make it possible for deposit-taking institutions to invest in Fannie Mae debt more liberally than in corporate debt and mortgage-backed and asset-backed securities. Others enable certain institutions to invest in Fannie Mae debt on par with obligations of the United States and in unlimited amounts.
Investors in Fannie Mae Debt Securities
The most active institutional investors in Fannie Mae debt securities include commercial bank portfolios and trust departments, investment fund managers, insurance companies, pension funds, state and local governments, and central banks. Fannie Mae offers debt structures to meet the needs of virtually every type of investor segment -- and Fannie Mae has experienced very strong participation in its funding program from investors both domestically and internationally.
Distribution Methods
Fannie Mae's debt securities are sold by a select group of securities dealers and dealer banks, many of which also sell U.S. Treasury obligations, through a variety of negotiated and underwritten methods. The approved dealers for underwriting various types of Fannie Mae debt securities may differ by funding program.
ACCESS® Program
In September 1992, Fannie Mae announced our ACCESS® program. This program was designed to increase the participation of minority- and women-owned securities firms in the markets for Fannie Mae's securities. Currently, there are over one dozen ACCESS® debt selling group members. The ACCESS® firms participate in all of Fannie Mae's short- and long-term debt programs and are usually reserved up to 3 percent of every bullet Benchmark Securities issuance. During the past decade, ACCESS® firms have sold over $150 billion in new issue Fannie Mae securities.
|
|
Last Revised: June 16, 2009
|
|
|
|
|
This document is for information purposes
only. It is neither an offer to sell nor a
solicitation of an offer to buy any Fannie
Mae security. Fannie Mae securities are offered
only in jurisdictions where permissible by
offering documents available through qualified
dealers. Securities issued by Fannie Mae are
not guaranteed by the United States and do
not constitute a debt or obligation of the
Unites States or of any agency or instrumentality
thereof other than Fannie Mae. All statements
made herein are qualified in their entirety
by reference in the applicable offering documents.
Securities discussed herein may not be eligible
for sale in certain jurisdictions or to certain
persons and may not be suitable for all types
of investors. An offering only may be made
through delivery of the Offering Document.
Investors considering purchasing a Fannie
Mae security should consult their own financial
and legal advisors for information about such
security, the risks and investment considerations
arising from an investment in such security,
the appropriate tools to analyze such investment,
and the suitability of such investment in
each investor's particular circumstances.
|
|
|
|
