QUICK DEFINITION
Agency Bond is a debt security issued by a government-sponsored enterprise or government-related agency rather than directly by the sovereign treasury.
WHY IT MATTERS
Why Agency Bond matters in bond markets
Agency bonds can carry different credit, liquidity and prepayment risks from government bonds.
MARKET CONTEXT
How to think about it
Bond investors use agency bond as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Agency Bond important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Agency bonds can carry different credit, liquidity and prepayment risks from government bonds.