Freddie Mac (FRE) on Tuesday launched a new five-year issue and $1 billion reopening of its two-year notes sold last month.

The mortgage finance company is expected to see a continuation of the investor interest it has enjoyed over the past few months.

Last month, Freddie sold $3 billion of 10-year and $5 billion of two-year notes. The company decided to shrink both these issues to smaller sizes from the megadeals earlier in the year.

On Tuesday, Freddie will sell through an Internet auction the $1 billion of its reopened 1.625% note. That security currently trades 1.5 basis points wider at 46/44, according to TradeWeb data.

The mortgage company is expected to launch and sell its five-year issue on Wednesday. The book is expected to be built over the course of the next 24 hours by lead managers Deutsche Bank, Goldman Sachs and Morgan Stanley.

Currently, Fannie's 2.75% five-year note due March 2014 trades 2 basis points wider at 71/67.5, according to TradeWeb data.

-By Prabha Natarajan, Dow Jones Newswires; 201-938-5071;

prabha.natarajan@dowjones.com