It’s been a tough year for many borrowers in the international capital markets. Corporate issuers in particular have fallen quickly from grace, having been the market’s darlings a year ago. Now fixed income investors across the world are increasingly risk-averse. Certain sectors of the primary markets, US high yield for example, are very difficult to access. In response to these troubles, many of those borrowers that bankers and investors have nominated to be awarded for their efforts in the past 12 months have reverted to a strategy first made popular by Fannie Mae two years ago. They are striving to produce large, liquid benchmark issues that will at least give investors the comfort that they can easily trade in and out. Where Fannie Mae, our borrower of the year, has led, others, such as Ford, our best corporate borrower, and even smaller issuers such as Brazil, our best sovereign, and IADB, best supranational, have followed.The best corporate, sovereign, financial and securitization borrowers from Europe, central and eastern Europe, Asia and Latin America

In an uncertain and volatile market, Fannie Mae ought to be an obvious choice for best borrower. Investors do not seem to be on the desperate hunt for yield that dominated their decisions two years ago. Now they hunt the right credit, and increasingly that means looking for a credit with liquidity. With annual funding needs in the hundreds of billions of dollars, Fannie Mae should be providing that.

And it is. The US mortgage agency now has a full yield curve stretching out from two years to 30 years, has started to see other borrowers price deals off its deals, and has even been touted as a replacement benchmark for US treasury bonds as fewer are issued and more redeemed. Fannie Mae is playing down this latter role people have ascribed to it. Partly out of diplomacy as legislators on Capitol Hill scrutinize the role the agencies play in the markets, and the role government...