Agency bond

(redirected from Agency Bonds)

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 Financial Industry Regulatory Authority has released guidance to help securities firms implement a new rule requiring enhanced price disclosure to retail investors for trades in corporate and agency bonds.
Over time, Quandl and ICE Data Services intend to expand this offering to include data on agency bonds, corporate bonds, mortgage-backed securities, equities, mutual funds, options and more.
29 Federally sponsored agency bonds, gross sales by
A new mixed-use development in Brooklyn, featuring 714-residential units and 57,700-square-feet of retail space, has been financed with USD250 million of New York State Housing Finance Agency bonds backed with a letter of credit led by M&T Bank.
5 million in agency bonds to pay for a host of expansion projects at Kentucky's community and technical colleges.
Finra found that Morgan Stanley failed to use reasonable diligence to ensure that the purchase or sale price to the customer was as favourable as possible in 116 customer transactions involving corporate and agency bonds.
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.
A unique aspect of this defeasance was the use of Agency for International Development (AID) bonds that saved The Groves $100,000 on the cost of the defeasance compared to a portfolio of traditional agency bonds, such as Fannie Mac and Freddie Mac securities.
In addition, 24 public institutions under the program also plan to issue FILP agency bonds to raise 6,226.
In principle, each agency has to issue its own FILP agency bonds.
The success of these direct and quasi-government agencies spills over into many large businesses ancillary to the mortgage business--most notably the country's solid banking system by virtue of increased local home lending and investments in agency bonds sold by the Maes.