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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".
conversion depends on many factors, some fixed, some floating such as:
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
Security House, Bonding Agent, Underwriter, etc. - Rating, location,
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.
is needed for this type of transaction.
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,
Recommended further reading:
Medium Term Notes and High Yield Investment Programs
of Corporate Medium-Term Notes