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Fannie Mae Introduces Benchmark REMICsTM


April 20, 2006, WASHINGTION, DC -- Fannie Mae (FNM/NYSE) today announced the introduction of its Benchmark REMICsTM securities, a multi-class mortgage-related security with enhanced structural, price transparency and liquidity features for fixed-income investors. The company expects to announce, price and settle its initial issue sometime this quarter and, subsequently, anticipates issuing up to two transactions per quarter thereafter. Fannie Mae will announce each new issue by press release.

“Having met with and listened to investors throughout the fixed-income investment community, we’re very pleased to respond with today’s announcement,” said Peter Niculescu, executive vice president, Capital Markets. “This most recent development in Fannie Mae’s issuance of REMICs should help us better serve our affordable housing mission by attracting more capital to the U.S. housing market through broadened distribution of Benchmark REMICs to a potentially more diverse mortgage investor base globally.”

Benchmark REMICs will have four defining characteristics designed to facilitate improved liquidity and price transparency for specific REMIC classes issued through this initiative. These characteristics are:

* Syndicated dealer distribution for maximum breadth of distribution as well as to encourage active secondary market support across time zones
* A large issue size Guaranteed Maturity Class (GMC), with a stated final maturity, included in each Benchmark REMIC transaction
* Minimum new issue size of $1 billion for each GMC to promote liquidity
* Enhanced price transparency features represented by live price quotes on TradeWeb for the GMCs of each Benchmark REMIC transaction

Benchmark REMICs will generally be collateralized by fixed-rate, first lien, single-family mortgage Fannie Mae MBS pools and the GMCs will be brought to market through a traditional dealer syndicate underwriting process. Each dealer underwriting syndicate will consist of two or three lead managers chosen from our Benchmark REMIC dealer group, as well as a number of co-managers.

“To facilitate breadth of distribution to a wide variety of investors and to enact a fully transparent new issue pricing process, we have carefully selected dealers based on their expertise in the REMIC market as well as their profile in the agency mortgage-backed securities market at large,” Niculescu said. “We will engage regularly with members of the group to gauge market demand for Benchmark REMICs.”

The structure and stated final maturity of the GMC in each Benchmark REMIC transaction as well as the characteristics of the underlying MBS used to collateralize each Benchmark REMIC will be disclosed at announcement to facilitate investor analysis of the security. For two to three days following the initial announcement, price discovery will occur, followed by official pricing. All pricing details will be made publicly available via press release. Fannie Mae will express pricing for the GMC of each Benchmark REMIC transaction as a spread, interpolated to the average life Treasury yield, for the particular coupon, average life and the prevailing Bloomberg dealer median prepayment forecast for the underlying collateral at the time of pricing.

The actual size of each Benchmark REMIC issue and its corresponding GMC class will be determined by investor interest, as well as the availability of underlying MBS collateral for these transactions. Once Benchmark REMIC transactions are priced, they cannot be upsized or reopened. More information on Benchmark REMICs can be found on our Web site at

Fannie Mae is a New York Stock Exchange Company. It operates pursuant to a federal charter. Fannie Mae has pledged through its American Dream Commitment to expand access to homeownership for millions of first-time home buyers; help raise the minority homeownership rate to 55 percent; make homeownership and rental housing a success for millions of families at risk of losing their homes; and expand the supply of affordable housing where it is needed most.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities of Fannie Mae. Nothing in this press release constitutes advice on the merits of buying or selling a particular investment. Any investment decision as to any purchase of securities referred to herein must be made solely on the basis of the applicable offering documents, and that no reliance may be placed on the completeness or accuracy of the information contained in this press release.

You should not deal in securities unless you understand their nature and the extent of your exposure to risk. You should be satisfied that they are suitable for you in the light of your circumstances and financial position. If you are in any doubt you should consult an appropriately qualified financial advisor.

Benchmark REMICs is a trademark of Fannie Mae. Unauthorized use of this mark is prohibited.


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