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Foreign Government or Corporate Medium Term Notes (MTN's) 

Medium Term Notes (MTN's) - "Cash" them in for real dollars or raise a "Credit Line".

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

  • Type of Instrument or Note (Issuing Body) - Government or Corporate Government Issued are the most desired.

  • Rating from issuing institution - Government, Bank, Security House, Private What Currency, US Dollars is always preferred, but others are also acceptable Currency Fluctuation, if not already in US dollars.

  • Ownership of MTNs - Corporate, Bank, Trust, Endowment, Pension Fund, Private, Other
    Bank Policy Agent or Bank Holding Note(s)

  • Where MTNs are actually held - Security House, Bank Vault, Bank Safety Deposit Box, Licensed and Insured Agent, Trust, Other
    Market Conditions
    Security House, Bonding Agent, Underwriter, etc. - Rating, location, etc.
    Client Anticipation of Return
    Place Transaction Occurs

What is done with 'Cash' after conversion

This is becoming a paramount issue with banks and 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 not less than 50% for a period of not less than six (6) months. If with a security house the funds can be put into a money market or reinvested into other securities.


  • MTN's are a method or avenue of selling off 'Debt'.

  • MTN's are usually issued by a Government Entity.

  • MTN's can be issued by a Public Listed Corporation.

  • MTN's held by individuals are highly questioned by banks and trading houses throughout the world.

  • Often times, in this case, it may be easier to raise a 'Credit Line' than convert the instrument to CASH, especially if an individual is selling the MTNs.

  • 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.

  • MTNs and T-Bills are one of the most sought after instruments.

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

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:
Medium Term Notes and High Yield Investment Programs
1996 Survey of Corporate Medium-Term Notes