Who are the most active users of agency debt financing?

The most active users of agency debt financing are typically farm credit and housing entities. This financing is primarily facilitated through government-sponsored enterprises (GSEs), which are designed to enhance the flow of credit to specific sectors of the economy, particularly housing and agriculture.

Farm credit institutions utilize agency debt to provide loans to farmers and agricultural businesses, helping to sustain the agricultural sector's financial health and growth. Likewise, housing entities, such as those dealing with affordable housing or mortgage-backed securities, leverage agency debt to improve access to home financing, ensuring that more individuals can obtain mortgages at favorable rates.

Moreover, agency debt is characterized by lower interest rates due to the implicit or explicit backing by the government, making it a cost-effective financing option for these entities. As a result, farm credit and housing institutions increasingly rely on this type of financing to support their operations and lending activities. This active usage aligns with the intent of agency debt financing to promote stability and accessibility in critical economic sectors.