Investing in Agency Securities

Agency securities, debt issued by U.S. Government Agencies, have many characteristics that appeal to investors. Because they are guaranteed by a U.S. Government Agency, these securities are rated AAA by the rating services. Agency Securities trade at a spread above U.S. Treasuries of a comparable maturity. In addition, Agencies such as FNMA, are now selling large new issues every month. This provides great liquidity for these bonds. Finally, in addition to bullet maturities, many different structures are available to meet investors' specific requirements.