In addition to the U.S. Treasury and local municipalities, other government agencies (usually at the federal level) issue bonds to finance their activities. These agency bonds help support projects relevant to public policy, such as farming, small business, or loans to first-time home buyers. Agency bonds are no small matter, however -- according to the Bond Market Association, agency bonds worth $845 billion are now outstanding in the market. These bonds do not carry the full-faith-and-credit guarantee of government-issued bonds (for example U.S. Treasuries), but investors are likely to hold them in high regard because they have been issued by a government agency. That translates into more favorable interest rates for the agency, and the opportunity to support sectors of the economy that might not otherwise be able to find affordable sources of funding.
Among the federal agencies that issue bonds are:
While most investors in federal agency securities are institutional, individuals can also invest in this segment of the debt securities market.