Definition
Agency bonds are issued by government-sponsored enterprises (GSEs) such as Fannie Mae, Freddie Mac, and Federal Home Loan Banks. They're not directly backed by the U.S. government but carry an implicit guarantee. Agency bonds offer slightly higher yields than Treasuries with very low credit risk.
Example
Fannie Mae issues bonds to fund mortgage purchases. These yield about 0.25% more than Treasuries due to perceived (minimal) additional risk.
FAQ
What is Agency Bond?
Bonds issued by government-sponsored enterprises like Fannie Mae.
Why is Agency Bond important?
Agency Bond helps investors evaluate fixed income and make more informed decisions.