General
Medium Term Notes (MTN) are medium-term bonds with a maturity of 1 to 10 years. MTN have become a key funding source for national and foreign companies, supranational institutions, and independent countries.
MTN are sold by investment banks and by other broker companies on the base of best performance. MTN are also sold in smaller quantities than bonds. Most of the MTN are traded in non-customary formulas based on floating interest rates or commodity prices.
Besides, the medium term is not required for MTN to fill the stated maturity level; they can have maturities from 9 months to 13 years. The MTN market has increased the funds of the companies and changed the way of the investments made by the corporations.
This change has caused a rapid rise in derivatives markets, which have transferred the risks of investors and borrowers such as Swaps, Options and Futures to other risk preferences of the financial system. In the 1990s and after, the US market drew the attention of new borrowers. Meanwhile the Euro-MTN market, which is outside the United States, grew rapidly.