Fannie Mae's board of directors has approved the redemption of all eight million outstanding shares of series K variable-rate noncumulative preferred stock.The government-sponsored enterprise said the shares, which have an aggregate stated value of $400 million, will be redeemed in accordance with the series K stock's certificate of designation of terms. The stock will be redeemed on April 2 at a redemption price of $50 per share plus a dividend, which will accrue at the swap rate (as defined in the certificate of designation) plus 1.33% for the period from March 31 to April 2, 2007, Fannie said. Robert Blakely, Fannie's chief financial officer, said redeeming the costly variable-rate stock in the current rising rate environment "will result in millions of dollars in annual after-tax savings." The GSE can be found online at http://www.fanniemae.com.

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