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NEW YORK -(Dow Jones)- Fannie Mae (FNM) sold $6 billion of three-year notes in a benchmark issue Thursday, following a similar large-sized offering from Freddie Mac (FRE)last week.

The Office of the Federal Home Loan Banks is expected to come out with its own offering next week, scheduled for next Wednesday, as all three government-sponsored enterprises tap the market before the end of the Federal Reserve's purchase program March 31.

"Certainly the GSEs are doing large-sized deals to lock in funding needs before the end of the fed program," said Margaret Kerins, head of agency strategy at RBS.

For the GSEs, issuing benchmark notes this month is an accessible way to get large amount of funding done; while for investors it's a safe-haven purchase with the likely option of selling it to the Fed when it conducts its last purchase later this month.

Market participants expect the central bank to purchase agency debt with maturities in the three-year range, but there's no official word on it.

"That's the play here," Kerins said.

In addition, investors find these debt securities with a government backing to be a safe bet.

"What is primarily driving demand for agency debt is investors' continued need for high-quality assets, especially at a time when other government-backed issuance has decreased," Kerins said.

The three-year sector, which has outperformed other maturities, matches the funding needs of the government-sponsored enterprises. It also is popular with investors given the steep Treasury curve.

The Fannie deal sold at 31 basis points over comparable Treasury yields, with a yield of 1.803%.

Bank of America, Deutsche Bank Securities and J.P. Morgan were lead managers.

U.S. investors bought 70% of the deal, while Asian buyers picked up 17%, the company said.

Fund managers bought 60% of the deal, while central banks bought 28.5%. This is slightly changed from the purchase trend for Fannie debt so far this year, where central banks have bought 34% of Fannie's issuance to date, and fund managers 52%, according to the company.

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