Agency bond

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Related to Agency bond: Eurobond, municipal bond

Agency Bond

A debt obligation owed by an agency of the U.S. Government. While similar to a Treasury security, agency bonds are issued by a particular agency of the federal government, rather than the federal government itself. These agencies include Ginnie Mae, the Federal Farm Credit Bank, and the U.S. Postal Service. With the exceptions of the Postal Service and the Tennessee Valley Authority, all these obligations are guaranteed by the U.S. Government. They offer higher interest rates than Treasury securities. They are less formally called agencies.

Agency bond.

Some federal agencies, including Ginnie Mae (GNMA) and the Tennessee Valley Authority (TVA), raise money by issuing bonds and short-term discount notes for sale to investors.

The money raised by selling these debt securities is typically used to make reduced-cost loans available to specific groups, including home buyers, students, or farmers.

Interest paid on the securities is generally higher than you'd earn on Treasury issues, and the bonds are considered nearly as safe from default. In addition, the interest on some -- but not all -- of these securities is exempt from certain income taxes.

Securities issued by former federal agencies that are now public corporations, including mortgage-buyers Fannie Mae and Freddie Mac, are also sometimes described as agency bonds.

References in periodicals archive ?
That's why investors holding agency bonds already receive a significant risk premium over Treasuries.
Indeed, as the experience of government-sponsored enterprises (GSEs) in the United States has shown, it is easy to anticipate that FILP agencies would be unable to obtain sufficient funds by issuing only their own non-guaranteed FILP agency bonds, especially in the initial stage of the new system.
Wall Street pros also love the fact that agency bonds give you a bit more zip for the buck.
Thomas Gira, executive vice president of FINRA Market Regulation, said, 'FINRA is committed to ensuring that customers who purchase and sell securities, including corporate and agency bonds, receive fair prices.
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FINRA found that from July 2007 through September 2010, Citi International charged excessive corporate and agency bond markups and markdowns.
The local agency bonds were issued pursuant to the Mello-Roos Act.
The program is subsidized through State of Florida Housing Finance Agency bonds and targeted to first time home buyers or low income applicants.
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government bonds, federal agency bonds, and corporate debt securities rated A or better by national independent rating organizations.