Agency security

Securities
Securities Banknote Bond Debenture Derivative Stock
Markets Stock market Commodity market Foreign exchange market Futures exchange Over-the-counter market (OTC) Spot market
Bonds by coupon Fixed rate bond Floating rate note Inflation-indexed bond Perpetual bond Zero-coupon bond Commercial paper
Bonds by issuer Corporate bond Government bond Municipal bond Pfandbrief
Equities (stocks) Stock Share Initial public offering (IPO) Short selling
Investment funds Mutual fund Closed-end fund Exchange-traded fund (ETF) Hedge fund Index fund Segregated fund
Structured finance Securitization Agency security Asset-backed security Mortgage-backed security Commercial mortgage-backed security Residential mortgage-backed security Tranche Collateralized debt obligation Collateralized fund obligation Collateralized mortgage obligation Credit-linked note Unsecured debt
Derivatives Forward Futures Option Swap Warrant Credit derivative Hybrid security

Agency securities are specific securities that are issued by either Ginnie Mae, Fannie Mae, Freddie Mac or the Federal Home Loan Banks. These securities are backed by mortgage loans, and due to their creation from these particular corporations that are sponsored by the U.S. government, they enjoy credit protection based on either an explicit guarantee from the U.S. Government in the case of Ginnie Mae securities, or an implicit guarantee from the U.S. Government in the case of Fannie Mae and Freddie Mac. Agency securities also used as collateral for the supply of money released by the Federal Reserve. This collateral is chiefly held in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities.^[1]

Due to the expectation of federal backing, these securities historically hold the highest credit rating possible.

References

External links

• Fannie Mae
• Freddie Mac
• Ginnie Mae