Agency debt
Encyclopedia
Agency debt is a security, usually a bond, issued by a U.S.
government-sponsored agency
. The offerings of these agencies are backed by the government
, but not guaranteed by the government since the agencies are private entities. Such agencies have been set up in order to allow certain groups of people to access low cost financing e.g. students and home buyers. Some prominent issuers of agency securities are Student Loan Marketing Association (Sallie Mae), Federal National Mortgage Association
(Fannie Mae) and Federal Home Loan Mortgage Corporation
(Freddie Mac). Agency securities are usually exempt from state and local taxes, but not federal tax
. Agency debt is also called an agency security.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
government-sponsored agency
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
. The offerings of these agencies are backed by the government
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
, but not guaranteed by the government since the agencies are private entities. Such agencies have been set up in order to allow certain groups of people to access low cost financing e.g. students and home buyers. Some prominent issuers of agency securities are Student Loan Marketing Association (Sallie Mae), Federal National Mortgage Association
Federal National Mortgage Association
The Federal National Mortgage Association , commonly known as Fannie Mae, was founded in 1938 during the Great Depression as part of the New Deal. It is a government-sponsored enterprise , though it has been a publicly traded company since 1968...
(Fannie Mae) and Federal Home Loan Mortgage Corporation
Federal Home Loan Mortgage Corporation
The Federal Home Loan Mortgage Corporation , known as Freddie Mac , is a public government sponsored enterprise , headquartered in the Tyson's Corner CDP in unincorporated Fairfax County, Virginia....
(Freddie Mac). Agency securities are usually exempt from state and local taxes, but not federal tax
Income tax in the United States
In the United States, a tax is imposed on income by the Federal, most states, and many local governments. The income tax is determined by applying a tax rate, which may increase as income increases, to taxable income as defined. Individuals and corporations are directly taxable, and estates and...
. Agency debt is also called an agency security.