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Federal Agency Securities

Federal Agencies* are authorized by Congress to support specific needs in the nation's economy. These agencies finance their funding requirements through the public sale of discount notes and debentures. These securities are obligations of the issuing agency and are not guaranteed by the U.S. Treasury.

Terms and Structures

Maturity
Agency obligations typically have maturities from one month to 15 years.
Issued
Securities are brought to market by a nationwide selling group of banks and dealers. The Agency sets the rate on the securities according to market conditions. Orders are usually placed prior to that announcement. Shortly after the price is set, the issues are traded in the secondary market, and investors must pay the current market price, which varies with market conditions and current interest rates.
Rate Structure
Yields vary according to market conditions, maturities, tax status, and size of issue.
Interest
Paid at maturity for debentures of less than one year and semi-annually for longer-term issues. On discount notes, the interest is the difference between the purchase price and par value.
Denominations
Vary based on the Agency and maturity.
Form
Transactions are by book entry.
Quoted
Agency debentures are quoted on a dollar price basis, with fractional dollars represented in terms of 32nds, e.g. a price quotation of 100.16 means 100 16/32 or $100.50 per $100 of maturity value. Agency discount notes are quoted on a discounted yield basis.
Security
Federal Agency obligations are not backed by the federal government. However, because of close government supervision, it is considered by most analysts to be unlikely that the U.S. Government would permit agency obligations to go into default.

Federal Agencies

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* Products and services are offered by Wachovia Capital Markets, LLC ("WCM").

Wachovia Securities is the trade name for the corporate and investment banking services of Wachovia Corporation and its subsidiaries, including Wachovia Capital Markets, LLC ("WCM"), member FINRA/SIPC.

Debt and equity underwriting, trading, research and sales, loan syndications agent services, and corporate finance and M&A advisory services are offered by WCM.

Mezzanine capital, private equity, municipal securities trading and sales, cash management, credit, international, leasing and risk management products and services are offered by various non-broker dealer subsidiaries of Wachovia Corporation.

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