An agency issue is a term used to describe a debt security issued by any authorized entity of the United States Government. The debt security is an obligation of the issuing entity, not an obligation of the United States Government (with the exception of “Ginnie Mae” and the Federal Import Export Bank issues)
Applying "Agency Issue" to Securities Exams:
Many so called government sponsored entities or GSE’s issue agency securities. These debt issues are used to raise capital to help the particular entity meet its stated objective. These agency securities carry slightly more risk than those issued directly by the U.S. Government. As such, these securities will offer investors a slightly higher interest rate than Treasury securities. Fannie Mae, Freddie Mac and Ginnie Mae all provide capital to the mortgage markets and issue securities to provide the required funding. Sallie Mae is another GSE who provides funding for student loans and will issue agency securities to help fund portfolios of student loans.