- Medium Term Note
A Medium Term Note (MTN) is a
debt notethat usually matures (is paid back) in 5-10 years, but the term may be as short as one year or as long as 50 years. They're normally issued on a floating basis such as Euribor +/- basis points. When they are issued in a Euro-currency (say, Eurodollars or Euroyens), they are called "Euro Medium Term Notes".
Medium Term Note Program
The notes are usually connected to a Medium Term Note Program, which is a funding program used by issuers to receive
bond debtfunding on a regular and continuous basis. Their programs can include more than one issuer although the issues are independent up to a maximum amount authorised. The advantage to issuers is that they are not required to produce a full suite of legal documents each time they want to issue notes. Instead, a series of underlying documents are amended with each issue by a pricing supplement which sets out the terms of each specific issue of notes. This makes access to debt funding easier and cheaper. Programs are registered in a supervisory authority such as the London Stock Exchangeand the Luxembourg Stock Exchange.
Most large companies have established Medium Term Note Programs to finance their medium term financing needs. Countries also use these programs to access the
Some issuers such as investment banks like
Morgan Stanleyand Merrill Lynchhave adapted their Medium Term Note programs to issue more sophisticated notes such as securities linked to the share price of public companies (equity-linked notes) or the price of share indices such as the FTSE 100or NASDAQ(index-linked notes).
* [http://www.realcorporatelawyer.com/faqs/faqmtn.html Description of Medium Term Note programs and how they work from Realcorporatelawyer.com]
* [http://www.investopedia.com/terms/m/mtn.asp Medium Term Note - MTN]
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