MTN — Medium Term Debt Instruments for Sophisticated Investors

Introduction

Medium Term Notes (MTNs) are debt securities with maturities between 5 and 10 years, issued by banking institutions or government entities. They are a key asset in structured finance. But what makes them so special?

What is an MTN?

An MTN is a flexible bond, often issued “on demand” from the market, which can be customized in terms of currency, duration, interest rate, and payment structure.

Why invest in MTNs?

  • Competitive yield.
  • Flexibility in maturities.
  • Customizable risk profile.

Who issues MTNs?

  • Multinational banks.
  • Governments.
  • Financial institutions.

How are they traded?

  • On the primary market, at the time of issuance.
  • On the secondary market, through brokers or dedicated programs.

Use in Structured Finance

  • Collateralization.
  • Participation in PPPs.
  • Regulated arbitrage operations.

Risks to Consider

  • Variable liquidity.
  • Issuer credit risk.
  • Possible fraud in the secondary market.

Conclusion and CTA

MTNs represent a great opportunity to diversify your portfolio and access high-yield operations. Contact us for a free assessment of your profile and receive verified proposals.

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