1.
Debt instruments issued by
government sponsored entities, especially
mortgage-backed securities from
Ginnie Mae,
Fannie Mae, and
Freddie Mac, and the
Federal Home Loan Banks. Because each of those organizations is sponsored by the U.S. government, agency securities are implicitly guaranteed, and, in the case of Ginnie Mae, are backed by the
full faith and credit of the United States. As such, agency securities have historically had high
credit ratings, though they were criticized for an alleged role in the 2007-08
credit crunch.
2. An alternative term for
government sponsored entities.