Agency Securities -- Securities issued by government-sponsored entities (GSEs) and federally linked organizations.
At present, the GSEs that bring out securities are 8 organizations that are chartered publicly and owned privately. They were set up to make it easier to borrow for certain classes of population including students, agriculturalists and homeowners. GSEs include the Federal Farm Credit Bank System, Farm Credit Financial Assistance Corporation, Federal Home Loan Bank, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association (FNMA), Student Loan Marketing Association (SLMA), and Financing Corporation (FICO). The instruments that GSEs issue comprise discount notes (redeemable the next day or within a year) and bonds . With the exemption of the Farm Credit Financial Assistance Corporation, GSE securities do not have the total endorsement and faith of the U.S. government. The GSEs that previously made direct issues currently resort to the Federal Financing Bank for loans.
The other bodies that can issue agency securities are federally related institutions. However, these have not directly introduced securities into the market once the Federal Financing Bank was founded in 1973 to fulfill their overall borrowing requirements. Among these institutions are the Export-Import Bank (Eximbank) of the United States, the General Services Administration, the Farmers Housing Administration, the Commodity Credit Corporation, the Maritime Administration, the Rural Electrification Administration, the Rural Telephone Bank, the Maritime Administration, the Private Export Funding Corporation, the Tennessee Valley Authority (TVA), the Washington Area Transit Authority, and the Small Business Administration (SBA). All the responsibilities of the federally related institutions are backed by the credit and trust of the U.S. government, with exceptions being made in the cases of the TVA and the Private Export Funding Corporation.
Agency securities do not come under SEC registration conditions as well as state and local income taxes.
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