New Issue: Fannie Mae sells $50 million callable step-up notes with 2% initial rate

By Susanna Moon

Chicago, Feb. 4 - Fannie Mae priced $50 million of step-up notes (/AAAe/) due Feb. 25, 2016 at 99.80 on Friday.

The coupon is 2% for the first two years. After that, the rate steps up by 50 basis points for six six-month periods, ending at 5%.

The notes are callable at par of $100 on any quarterly redemption date beginning Aug. 25, 2011.

BMO Capital Markets Corp., Pershing, LLC and SunTrust Robinson Humphrey Inc. were the bookrunners.

Issuer:	Fannie Mae
Issue:	Step-up notes
Amount:	$50 million
Maturity:	Feb. 25, 2016
Coupon:	2% for two years, 2.5% for six months, 3% for six months, 3.5% for six months, 4% for six months, 4.5% for six months, 5% for six months
Price:	99.80
Call option:	At $100 quarterly after six months
Pricing date:	Feb. 4
Settlement date:	Feb. 25
Bookrunners:	BMO Capital Markets Corp., Pershing, LLC and SunTrust Robinson Humphrey Inc.
Ratings:	Standard & Poor's: AAA
Cusip:	33136FRBB8

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