Frank J. Fabozzi, Ph.D., CFA
Adjunct Professor of Finance School of Management Yale University
George P. Kegler
President Cassian Market Consultants
Federal agency securities can be classified by the type of issuer-federally related institutions and government-sponsored enterprises. Federal agencies that provide credit for certain sectors of the credit market issue two types of securities: debentures and mortgage-backed/asset-backed securities. Our focus here is on the former securities.
Federally related institutions are arms of the federal government and generally do not issue securities directly in the marketplace. Federally related institutions include the Export-Import Bank of the United States, the Tennessee Valley Authority, the Commodity Credit Corporation, the Farmers Housing Administration, the General Services Administration, the Government National Mortgage Association, the Maritime Administration, the Private Export Funding Corporation, the Rural Electrification Administration, the Rural Telephone Bank, the Small Business Administration, and the Washington Metropolitan Area Transit Authority.
All federally related institutions are exempt from SEC registration. With the exception of securities of the Tennessee Valley Authority and the Private Export Funding Corporation, the securities are backed by the full faith and credit of the U.S. government. Interest income on securities issued by federally ...