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Corporate Promissory Notes 

Corporate Promissory Notes (CPN's) - Issued by Major Corporations, usually public listed
and underwritten by a Bank or Underwriter. This can be any foreign bank, or a Central Bank
from country of origin.

Convert to Cash like handling a BG or raise a Credit Line.

Value conversion depends on many factors, some fixed, some floating such as…

  • Type of Promissory Note (time, maturity date, ownership, value, etc.)

  • Issuing Corporate Rating (preferably a Dunn and Bradstreet or similar Credit Rating)

  • Underwriting or Guarantor Bank and their Rating (Central Bank of a Government, Local in Country Bank, Foreign Worldwide Bank, etc.)

  • Agent, Underwriter, Security House, or Bank Holding Promissory Note

  • What type of 'Currency', US Dollars is always preferred, but most others are acceptable

  • Market Conditions

  • Bank Policy or Underwriter Policy

  • Politics

  • Ownership, and Type of Restrictions, if any

  • Currency Fluctuation, if not already in US dollars

  • Client Anticipation of Return

  • Place Transaction Occurs

What is done with 'Cash' after conversion - this is becoming a paramount issue with banks or security houses converting the instrument, the preferred and acceptable method is to deposit a portion of the redeemed funds with the honoring bank or security house, usually as follows...

  1. For a 'Bank' not less than 50% for a period of not less than six (6) months.

  2. For a 'Security Trading House' not less than 30% either reinvested in other types of asset portfolio management (stocks, bonds, mutual funds, etc.) or in their money market fund.

Helpful hints:

  • CPN's are usually issued by a corporation as collateral or for the sole purpose of raising capital (liquid assets in the form of cash).

  • CPN's held by individuals are highly questioned by banks throughout the world.  It is generally easier to raise a 'Credit Line' than convert this type of instrument into CASH!

  • Fluctuating World Market Conditions set the pace and determine the trading value, if any.

  • Usually most every instrument can be converted, however, some are just Not desirable      

  • Trading Instruments on the current World Market.

  • Substantiated "Documentation' is needed for this type of transaction.

The Following Corporate Promissory Notes are very difficult to do at the present, and only a 'Credit Line' could be raised:

  • Any CPN issued from any Corporation in Indonesian unless backed by a Major World Bank.    

  • Any CPN issued from any Corporation in Thailand unless backed by a Major World Bank.    

  • Any CPN issued from any Corporation in Philippines unless backed by a Major World Bank.    

  • Any CPN issued from any Corporation in Malaysia unless backed by a Major World Bank.    

  • Any CPN issued from Corporation in Russia unless backed by a Major World Bank.    

  • Any CPN held by an Individual in lieu of a company, trust, corporation, endowment, or
    nonprofit entity.

The Following CPN's Are NOT Currently Tradable:

  • CPN's issued from Vietnam    

  • CPN's issued from Cambodia    

  • CPN's issued from Laos    

  • CPN's issued from Burma

Important Notice:
It is widely considered a trading rule that any securities are deemed NOT tradable if they originate from a non recognized international public trading exchange. This applied to Any type of Security Note (stock, bond, mutual fund, trust, MTN, debentures, etc.).

Recommended further reading:
Foreign Government or Corporate Medium Term Notes (MTN's)
United States Medium Term Notes (MTN's)
1996 Survey of Corporate Medium-Term Notes 
Type of Instruments