Agency spreads widen as markets rally; Fannie Mae new issue expected

By Lisa Kerner

Charlotte, N.C., May 8 - Agency spreads widened "slightly" on Friday, a source said.

Also on the day, Treasuries got a little more attention and, in an "unusual" development, both the government bond market and the stock market rallied, the source said.

Fannie Mae is expected to announce a new issue on Tuesday in either the three-year or 10-year part of the curve, the source added.

Fannie Mae reported its first-quarter 2009 results on Friday. The agency lost $23.2 billion, or $4.09 per diluted share, compared with a loss of $25.2 billion, or $4.47 per diluted share, in the fourth quarter of 2008, according to a Fannie Mae news release.

The "persistent deterioration in housing, mortgage, financial and credit markets continued to adversely affect our financial results," Fannie Mae said.

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