AGENCY DEBENTURES

Debt issued by a government-sponsored enterprise (GSE) or federal agency for financing purposes. These kind of debentures do not have any collateral as a back up, but by the credit worthiness and integrity of the issuer. Officially, the agency debentures are issued by Federal Agencies, Tennessee Valley Authority for example, and are backed by full credit and faith of the United States government. The GSE issued agency debentures are only backed by the GSE's ability to pay.