Fannie Mae, financier to one in four home buyers in the United States, believes Asian investors will bid for a big share of the US$390 billion worth of notes and bills it plans to auction next year. Chairman and chief executive Franklin Raines was in Hong Kong yesterday to unveil a securities issuance calendar detailing next year's capital-raising. Fannie Mae estimates it will issue US$290 billion in long-term debt next year. In addition, it plans to issue more than US$75 billion of non-callable benchmark notes and approximately US$20 billion to US$30 billion in callable benchmark notes. Publicly listed Fannie Mae, the world's biggest non-bank financial institution with assets of US$838 billion, provides, directly or indirectly, financing for one in four mortgage loans in the US. It earns its money on the 'spread' it pays to invest in mortgage assets, and the cost of the borrowings it raises by way of the notes and bills it auctions to buy the home loans. By selling their mortgages to Fannie Mae, the original home lenders are able to raise more funds to make further home loans. International investors had bought a third of all benchmark notes and bonds issued by Fannie Mae, said Mr Raines, with 14 per cent going to Asians. During his Asian tour to brief Fannie Mae's investors - mainly central banks and a growing number of commercial banks - Mr Raines dismissed concern over whether demand for housing in the US could be sustained. 'There is a great deal of comfort about the strength of the US housing market and the likelihood that we will see price increases over time,' he said. 'This will be driven fundamentally by demographics. The US is a growing country and we will add 30 million people this decade - that's 13 to 15 million households, which will require a very substantial building programme that is unlikely to fully meet demand.' Fannie Mae had succeeded in managing its margins despite the effects of 'repricing' - home-owners refinancing mortgages at lower interest rates. Mr Raines dismissed recent concerns expressed by critics over the mismatch between the duration of its assets (long-term mortgages) and liabilities (shorter-term borrowings). 'Many lost a lot of money on that bet when it was clear that we manage our mortgage portfolio the same way all the time - which is we buy mortgages and fund them matching the durations as best we can. 'At a time such as today there are short-sellers and traders who look for opportunities for trade and they like to talk it up in the press in order to get the momentum going for the trade,' he said. Earlier this week, Fannie Mae announced the pricing on a three-year US$5 billion issue carrying a coupon rate of interest payable twice-annually of 2.906 per cent. Priced at a small discount (99.913 to face value), the issue will yield 2.906 per cent to investors, or 74.5 basis points above comparable US Treasuries. Usually sold in large denominations, the notes are not accessible to small investors. However, Mr Raines said he believed bankers in Hong Kong were considering a plan to package the Fannie Mae notes into smaller lots that could be bought by retail investors.