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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…
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Type of Promissory Note
(time, maturity date, ownership, value, etc.)
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Issuing Corporate Rating
(preferably a Dunn and Bradstreet or similar Credit Rating)
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Underwriting or Guarantor
Bank and their Rating (Central Bank of a Government, Local in
Country Bank, Foreign Worldwide Bank, etc.)
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Agent, Underwriter, Security
House, or Bank Holding Promissory Note
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What type of ‘Currency’,
US Dollars is always preferred, but most others are acceptable
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Market Conditions
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Bank Policy or Underwriter
Policy
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Politics
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Ownership, and Type of Restrictions,
if any
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Currency Fluctuation, if
not already in US dollars
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Client Anticipation of Return
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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:
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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).
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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!
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Fluctuating World Market
Conditions set the pace and determine the trading value, if any.
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Usually most every instrument
can be converted, however, some are just Not desirable
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Trading Instruments on
the current World Market.
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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:
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Any CPN issued from any
Corporation in Indonesian unless backed by a Major World Bank.
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Any CPN issued from any
Corporation in Thailand unless backed by a Major World Bank.
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Any CPN issued from any
Corporation in Philippines unless backed by a Major World Bank.
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Any CPN issued from any
Corporation in Malaysia unless backed by a Major World Bank.
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Any CPN issued from Corporation
in Russia unless backed by a Major World Bank.
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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:
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.). Please E-mail your questions
to The Eagle Traders.
More
information is provided in the Member Area
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
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