Government-sponsored entities (GSE’s), most commonly referred to as federal agencies are financing entities created by Congress to fund loans to certain groups of borrowers, such as homeowners and farmers. The four most common GSE’s are:
- Federal National Mortgage Association (FNMA – Fannie Mae)
- Federal Home Loan Mortgage Corporation (FHLMC – Freddie Mac)
- Federal Home Loan Bank (FHLB)
- Federal Farm Credit Bank (FFCB)
Although all the agencies were created by Congress, there are some differences between them. Both FNMA and FHLMC are publicly- chartered companies (though both are currently under conservatorship) while FHLB and FFCB are systems comprising regional banks. Additionally, FFCB and FHLB have state and local tax exemption status on the interest from their bonds.
To conduct their lending business, GSE’s depend primarily on debt financing to fund their operations. The agencies issue bullet securities, callable bonds, floating rate debt and discount notes through a variety of formats such as formal controlled selling groups, competitive auctions, and negotiated underwritings.
Led by highly respected industry veteran Steve Ivcic, the government debt trading team at Drexel Hamilton provides the kind of expert advice and value added portfolio management strategies that clients can rely on. Having served on the Steering Committee for the Agency Traders Association, Ivcic spent the first decade of his career as Head Agency Trader and Senior Vice President at Prudential Bache Securities. He then helped build County Natwest GSI as a Managing Director before continuing his trading career as Head Agency Trader at Donaldson, Lufkin & Jenrette. Using more than two decades of trading expertise, Ivcic garnered nine years of additional and diversified experience on the “sell” side at UBS, Oppenheimer and Wachovia/Wells Fargo.
Always committed to excellence and the highest standards, Ivcic’s sales team at Drexel Hamilton is dedicated to building close client relationships that are founded on respect, integrity, and trustworthiness.