Securities issued by U.S. Government-sponsored entities (GSEs) and federally related institutions.
GSEs currently issuing securities comprise eight privately owned, publicly chartered entities created to reduce borrowing costs for certain sectors of the economy, such as farmers, homeowners, and students. They 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), Financing Corporation (Fico). GSEs issue discount notes (with maturities ranging from overnight to 360 days) and bonds. With the exception of the Farm Credit Financial Assistance Corporation, GSE securities are not backed by the full faith and credit of the U.S. Government. Other GSEs that formerly issued directly now borrow from the Federal Financing Bank.
Federally related institutions are arms of the U.S. Government and generally have not issued securities directly into the marketplace since the Federal Financing Bank was established to meet their consolidated borrowing needs in 1973. They include the Export-Import Bank (Eximbank) of the United States, the Commodity Credit Corporation, the Farmers Housing Administration, the General Services Administration, the Government National Mortgage Association (GNMA) the Maritime Administration, the Private Export Funding Corporation, the Rural Electrification Administration, the Rural Telephone Bank, the Small Business Administration (SBA) the Tennessee Valley Authority (TVA), and the Washington Metropolitan Area Transit Authority. Except for the Private Export Funding Corporation and the TVA, federally related institution obligations are backed by the full faith and credit of the U.S. Government.
Agency securities are exempt from SEC registration and from state and local income taxes.
See also Federal Farm Credit System; Federal Home Loan Bank System.
