Medium Term Notes – Investing in Short Term Medium Notes

There are a wide variety of different investment vehicles out there that can benefit individual investors and companies alike. Choosing the right investment vehicle means doing some research and getting to know your options, deciding which options are best going to meet your needs, and then investing intelligently in those investment vehicles to improve your portfolio or financial future. Investing wisely and with research and due diligence is essential to your success in the marketplace. One of the options that are available to you is medium term notes, so make sure that you consider this option as part of your investment portfolio.

A medium term note, which is also commonly referred to as an MTN, is a note that typically matures within a period of five years to ten years, though other maturities are also available. MTN are also corporate notes that are continuously offered by companies to different investments by way of a dealer. These investors can typically choose between several different maturities options, usually ranging from as few as nine months to as many as 30 years. Although these notes are available in the 30-year maturities, this is not a common option, as shorter term notes are more common.

When investors know that a note is a MTN, this gives them a basic idea of what the maturity is going to be when they are comparing the price of that note to other types of fixed income securities. When all else is equal, then the corporate rate on the MTN is typically going to be higher in comparison than the coupon rates that are achieved with shorter term ones. Short term medium notes are the MTN that have the shortest terms, such as nine month long notes rather than the 30 year notes.

This is a type of debt program that companies are generally going to want to use so that they will be able to have consistent cash flows coming in to the business, often on a weekly basis, from debt issuance. These MTN generally make it possible for companies to completely tailor their debt issuance in order to meet the company’s financial needs completely. MTN make it possible for a company to only register one time with the SEC rather than having to register every single time using different levels of maturity.

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