BONDS

1)     Agency bonds (FNMA Fannie Mae, FHLMC Freddie Mae, SLMA Sallie Mae, FFCB, FICB, FHLB), are MORAL OBLIGATIONS of the US government and are NOT backed by the full faith and credit of the US government with one exception GNMA Ginnie Mae bonds which are backed by the Full Faith and Credit of the US government.

2)     There are three types of Municipal Bonds ("munis") namely

 

       A) General Obligation bonds are backed by the full faith, credit and taxing authority of the municipality that issued them

       B) Revenue bonds are issued for specific projects. They are backed by the revenue of the specific projects (not backed by the full faith, credit and taxing authority of the entity that issued them)

       C) Private Activity bonds are issued to finance projects like the construction of stadiums

 

3)    Municipal bonds can be against Default and the two INS companies that insure municipal bonds are AMBAC and MBIA.