The Treasury Department yesterday announced its second offering of special securities targeted for foreign investors, in a continuing effort to lower the government's borrowing costs.

The Treasury will auction up to $1 billion in five-year, two-month notes that are to be sold only to foreigners. The Treasury will also auction $6.75 billion in notes for domestic buyers. Both tender offers are due on Nov. 28.

Treasury officials yesterday said the two foreign offerings were experiments and that the first one on Oct. 24 was successful. "The bottom line is our first issue was trading 20 basis points lower than the domestic issue sold at the same time and trading reasonably actively," said Thomas J. Healey, assistant Treasury secretary for domestic finance.

The Treasury's first issue was $1 billion of four-year notes, which sold at a slightly higher price and lower yield than the $6 million domestic issue on the same day.

The Federal National Mortgage Association this week made a similar offering of $300 million in securities. The Treasury had asked Fannie Mae to hold off its offering for several days until it could determine how well the notes would be absorbed by markets overseas. Healey said that offering also was successful.

The Treasury this summer decided to issue new securities to attract foreign capital and help reduce U.S. interest rates while preventing American investors from purchasing them to escape taxation.

The Treasury is eager to raise money overseas because it takes pressure off domestic capital markets and helps lower interest rates. The government's interest expenses -- and the federal budget deficit -- are thereby reduced.

The special targeted bond allows bondholders and interest recipients to keep their identities hidden from the U.S. government. It would require banks and other financial institutions to certify that the bond owner is not an American citizen or resident, however.

The bonds were structured to give European investors anonymity while giving Treasury a way to prevent Americans from buying them to evade U.S. taxes.