Sentence:  Pee-gee-enn. It's an <WSD>acronym</WSD>, that's what it is. That's what they call words made up of initials. 
Meaning of the word marked with <WSD> tags:  An abbreviation formed by the initial letters of other words, sometimes exclusively such abbreviations when pronounced as a word (as "laser") rather than as individual letters (initialisms such as "TNT").