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Muni Bonds Videos 71 videos

Finance: What is maturity?
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Maturity is, quite simply, the date when a debt becomes due. As for our maturity, well... we're still giggling about the word "due."

Finance: What are Freddie Mac and Fannie Mae (FNMA)?
21 Views

What are Freddie Mac and Fannie Mae? They sound like snack cakes to us, so, uh...maybe we should watch this video.

Finance: What are Bond Anticipation Notes, Revenue Anticipation Bonds, and Tax Anticipation Notes?
26 Views

What are Bond Anticipation Notes (BANS), Revenue Anticipation Notes (RANS), and Tax Anticipation Notes (TANS)? BANS, RANS and TANS are all short-te...

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Finance: What is an Agency Bond? 2 Views


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Description:

What is an Agency Bond? Agencies bonds are issued by government agencies, not the treasury. The typical government bonds (T-bills, T-notes, and such) are issued and backed by the treasury or a municipality; these are not. They are still backed by the government though, issued specifically by the government agencies: Federal Housing Administration, Small Business Administration, and Government National Mortgage Association.

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Transcript

00:00

Finance allah shmoop What is an agency bond Okay the

00:06

federal government sells a lot of paper all the time

00:09

That is it exchanges a promise to pay investors of

00:13

thousand bucks in a year in return for nine hundred

00:16

seventy two dollars today those federally backed pieces of paper

00:20

are back or guaranteed by the full faith and credit

00:23

of the us government's ability to tax it's poor hard

00:27

working and taxpaying citizens But inside of our massive government

00:31

exists all kinds of agencies particularly home and student and

00:35

you know other loan agencies who dole out money to

00:38

us citizens all the time Well fannie mae in her

00:42

brethren and while sister in is that a thing system

00:45

anyway her family of agencies while they issue paper as

00:48

well and they issue it separately from the federal government

00:52

And for the most part they're agency bonds look a

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whole lot like federal bonds with one key exception They

00:57

are not backed by the federal government's full faith and

01:01

credit directly Rather they're just backed by the credit worthiness

01:04

of the agency itself backing them that is fannie mae

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wants to raise cash for whatever more homes more loans

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Blah blah blah It sells paper to the public and

01:14

institutions and whomever and promises to pay well basically with

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a handshake That shake is based on its ability to

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raise more money in the future or wine loudly enough

01:24

so that the federal government steps in and bails them

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out If some one in a million crisis happens and

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hello two thousand eight financial crisis we're looking at you

01:33

All right Well the basic idea here is that agency

01:35

bonds are backed by the agency itself not by the

01:38

full whammy of the full federal government so they generally

01:41

yield a skosh more interest to account for that scootch

01:45

more risk that investors take in buying them No Should

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some other one in a million crisis ever happen again

01:52

So that's an agency bond not to be confused with

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a bond agency which you know is the british secret 00:01:58.357 --> [endTime] service

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