Agency securities, also known as Government Sponsored Enterprises (GSEs) are privately owned but federally chartered companies. While they enjoy certain competitive advantages as a result of their government charters, their debt obligations are unsecured and are not direct obligations of the U.S. Government. However, debt securities issued by GSEs are considered to be of high credit quality and the senior debt of GSEs is AAA rated.
The wide range of GSE-issued debt securities and programs offer investors the opportunity to:
Implement a current interest rate or currency view Hedge a specific risk Enhance portfolio liquidity Balance portfolio performance characteristics Minimize transaction costs
GSEs raise funds through a variety of debt issuance programs, including: Federal Home Loan Mortgage Corporation (Freddie Mac) Federal National Mortgage Association (Fannie Mae) Federal Home Loan Bank (FHLB) Federal Farm Credit Bank System (FFCB)
With the variety of GSE-issued debt securities and programs available, investors may benefit from a unique combination of high credit quality, liquidity, pricing transparency and cash flows that can be customized to closely match their objectives.
Your Financial Advisor will help you determine if agency securities are an appropriate investment for you.
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