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Agency debt

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 28 Apr 2023

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Agency Debt

Agency debt is a type of debt security issued by a government-sponsored enterprise (GSE) such as Fannie Mae or Freddie Mac. These securities are backed by the full faith and credit of the U.S. government, making them a safe and reliable investment. Agency debt is typically issued in the form of bonds, notes, and other debt instruments. The interest rate on agency debt is usually lower than other types of debt, making it attractive to investors.

History of Agency Debt

Agency debt has been around since the 1930s, when the Federal National Mortgage Association (FNMA) was created to help provide liquidity to the mortgage market. Since then, other government-sponsored enterprises such as the Federal Home Loan Mortgage Corporation (FHLMC) and the Government National Mortgage Association (GNMA) have been created to provide additional liquidity to the mortgage market. These GSEs are authorized to issue debt securities backed by the full faith and credit of the U.S. government.

Agency debt has become increasingly popular in recent years as investors seek out safe and reliable investments. The low interest rates on agency debt make it attractive to investors, and the fact that it is backed by the full faith and credit of the U.S. government makes it a safe and reliable investment.

Table of Comparisons

Type of Debt Interest Rate Risk Level
Agency Debt Low Low
Corporate Debt Medium Medium
High-Yield Debt High High

Summary

Agency debt is a type of debt security issued by a government-sponsored enterprise (GSE) such as Fannie Mae or Freddie Mac. These securities are backed by the full faith and credit of the U.S. government, making them a safe and reliable investment. Agency debt is typically issued in the form of bonds, notes, and other debt instruments. The interest rate on agency debt is usually lower than other types of debt, making it attractive to investors. For more information about agency debt, visit the websites of the GSEs or the U.S. Treasury Department.

See Also

  • Mortgage-Backed Securities
  • Treasury Bonds
  • Corporate Bonds
  • High-Yield Debt
  • Government-Sponsored Enterprises
  • Federal National Mortgage Association
  • Federal Home Loan Mortgage Corporation
  • Government National Mortgage Association
  • U.S. Treasury Department
  • Fixed-Income Securities

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