Fannie Mae (FNM) announced a new three-year benchmark note offering on Wednesday.

Initial price talk on the deal is in the area of 75 basis points over comparable Treasury yields.

Fannie has yet to announce the size of the deal.

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.

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

It's not clear if Fannie will continue to go for large issue sizes, or if like Freddie, it would tone them down this time.

"The deal is being marketed as a non-mega deal," said Mark Noble, head of agency trading at MF Global. Fannie is expected to cap the issue size at $4 to $5 billion.

A "comfortable size" for this offering would be $5 billion sold at 75 basis points over comparable Treasury yields, says Jim Vogel of FTN Financial in an analyst 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.

Currently, this bond trades at 56.5 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 Prabha Natarajan, Dow Jones Newswires, 201-938-5071; prabha.natarajan@dowjones.com