Corporate Promissory Notes

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...

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