Fannie Prices Stock Offerings

Fannie Mae has priced $2.25 billion (82 million shares) of its common stock (CUSIP 313586109) at $27.50 per share, and $2.25 billion (45 million shares) of 8.75% noncumulative mandatory convertible preferred stock, series 2008-1, at a liquidation preference of $50 per share.Each share of the preferred stock (CUSIP 313586745) will automatically convert on May 13, 2011, into 1.5408 to 1.8182 shares of Fannie's common stock, the company said. At the election of the holder, each share of the preferred stock may be converted at any time into 1.5408 shares of Fannie's common stock. Fannie Mae has granted the underwriters an option to buy up to 12.3 million additional shares of common stock and up to 6.75 million additional shares of the preferred stock. Lehman Brothers Inc., J.P. Morgan Securities Inc., and Citigroup Global Markets Inc. are the joint book-running managers for the common stock offering, and J.P. Morgan, Lehman, and Banc of America Securities LLC are joint book-running managers for the preferred stock offering.