Fannie Mae (FNM) launched its $4 billion three-year note at 75 basis points over comparable Treasurys, according to a person familiar with the deal.

The deal will likely be sold later this morning, said Jim Vogel, an analyst with FTN Financial.

"Before the books closed, the syndicate saw interest of at least twice the current size," Vogel said in a note.

This issue follows Freddie Mac's (FRE) sale of two benchmark notes last week, with maturities of two- and 10-years.

The sizes of these offerings were kept at a more normal level of about $3 billion on the 10-year, and $5 billion on the two-year. It offered the market a respite from the huge deals that had dominated the first few issues of this year.

Fannie's previous benchmark note sold in March was a $9 billion, five-year note.

Fannie's previous three-year issue was in January of this year, when it sold $6 billion of these securities at 83 basis points over comparable Treasury yields.

Barclays Capital, Deutsche Bank and J.P. Morgan are the lead managers on the deal, which is expected to settle on Friday.

 
   -By Anusha Shrivastava, Dow Jones Newswires; 201-938-2371; anusha.shrivastava@dowjones.com

(Prabha Natarjan contributed to this report)