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Foreign Government or Corporate Medium
Term Notes (MTN’s)
Value
conversion depends on many factors, some fixed, some floating
What is done with ‘Cash’ after conversion
Hints
Important Notice
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.
Hints
- 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.).
More
information is provided in the Member Area
Recommended further reading:
Medium Term Notes and High Yield Investment Programs
1996 Survey
of Corporate Medium-Term Notes
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