THE INTERNATIONAL CAPITAL MARKETS DISCOVER MAIN STREET
The Federal National Mortgage Association will probably borrow $20 to $25 billion of long-term funds this year a finance its operations as America’s largest purchaser of home mortgages. Depending on market conditions, about $2 billion of the total may be borrowed overseas, up from $1.2 billion last year.
Fannie Mae, as it is commonly known, has ventured abroad for three main reasons: to lower its cost of borrowed funds, sometimes by as much as 30 to 40 basis points; to obtain somewhat longer maturities than were available domestically, and to diversify its investor base.
For similar reasons, the US housing finance industry in general is increasingly looking overseas to raise much-needed capital.
It is a latecomer to the international capital markets, compared with other major sectors of the US economy.
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