15 years: Capital markets
A Medium-Term Note, or MTN, is a form of privately placed debt in a bond format. In this video, Aya answers the questions: what is a MTN, what is a private placement and what are the differences between MTNs and Public Benchmark Transactions?
A Medium-Term Note, or MTN, is a form of privately placed debt in a bond format. In this video, Aya answers the questions: what is a MTN, what is a private placement and what are the differences between MTNs and Public Benchmark Transactions?
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10 mins 17 secs
A Medium-Term Note refers to any fixed-income security with a maturity longer than 1 year. They are typically issued by financial institutions, corporations, and public finance borrowers.
Key learning objectives:
Define MTNs, MTN programmes and Private Placement
Explain the differences between MTNs and Benchmark transactions
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MTN Programme - This is an issuance programme that allows issuers, via a panel of MTN dealers, to continuously offer securities under different structures, sizes and maturities. They are typically listed on regulated stock exchanges, and are rated in line with borrowers credit ratings.
Benefit - If an MTN programme is set up and kept up to date, the borrower can issue debt very quickly with little additional cost, which means they can go ahead and raise capital quickly when the market conditions are favourable. Thus, if a borrower needs to access capital markets on a regular basis, it’s cost-efficient to set up an MTN programme.
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