A type of mortgage backed security (MBS) that is issued on a pool of securitized residential mortgage loans guaranteed by a certain government agency. By origin, it is an asset-backed security (ABS) secured by a mortgage or collection of mortgages issued by government agencies- in the US, federal agencies such as Fannie Mae, Freddie Mac and Ginnie Mae.

Agency MBSs are traded via both specified pool contracts (SP contracts) for individual securities and to-be-announced contracts (TBA contracts) for a category of heterogeneous securities in terms of underlying loans’ risk bracket and value. Low-value and high-value loans are securitized into separate groups of MBS sold in to-be-announced (TBA) and specified pool (SP) markets respectively. Issuing agencies pool low-value loans together into TBA MBS, but separate high-value loans into different SP MBS. Typically, larger issuers tap into TBA trading when structuring their MBSs.