Medium Term Notes

Medium Term Notes (MTNs) are a form of corporate debt financing. Few innovations in the capital markets have been as successful as the MTN. The ever-increasing number of borrowers and investors evidences this success. An MTN’s flexibility to meet the needs of both issuer and investor, the diversity of the notes’ available terms to maturity, special features that protect the investor and increases in the amount of notes outstanding have all contributed to significant growth in this sector of the fixed income marketplace.

MTNs are debt instruments that are issued in the same form but through a different mechanism than other types of corporate, financial institution or government obligations. The feature that primarily distinguishes traditional debt issues from MTNs is that MTNs are offered continuously through agents or dealers on a best efforts basis, rather than on a firm commitment (underwritten) basis.

Since its establishment in the early 80’s as a bridge over the funding gap between short- term commercial paper and long-term borrowings in the bond market, the MTN market has evolved to such an extent that the term “medium”is becoming a misnomer. While the vast majority of MTNs are issued in the short end of the maturity curve (2 – 5 years), MTN maturities in the 10 to 30 year range are becoming more commonplace.

The MTN market provides the investor with a broad range of investment grade credits across all industry sectors, including banks, corporations, finance companies, utilities, federal and provincial governments and their crown corporations. This feature offers the investor the opportunity to diversify risk.

By the very nature of the continuous-offering, investors have an infinite number of choices with respect to the type of notes purchased, maturity dates and dollar amounts. This provides the investor with the ability to fill portfolio gaps that traditional bonds may not meet.

We work with top 25 World Banks and assist clients who need a minimum of $100M.