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 ?
The new rule, approved by the Securities and Exchange Commission in November 2016, will require that firms disclose on retail-customer confirmations the mark-up or mark-down for certain transactions in corporate and agency bonds.
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.
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Like Treasuries, agency bonds pay interest every six months and have virtually no credit risk.
According to FINRA, the banking company had, charged excessive corporate and agency bond mark-ups and markdowns from July 2007 to September 2010.
FINRA found that from July 2007 through September 2010, Citi International charged excessive corporate and agency bond markups and markdowns.
3 trillion in these agency bonds, according to the U.
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5 million in agency bonds to pay for a host of expansion projects at Kentucky's community and technical colleges.
high-grade corporate bonds, European bonds, high yield and emerging markets bonds, agency bonds, asset-backed and preferred securities and credit default swaps.
Among its offerings is the broker-dealer and investment adviser firm's trading opportunities program, which allows credit unions to purchase government agency bonds and capture some of the concession paid on these new issues.