Euro-medium-term-note market

Question

State difference between the Euro-medium-term-note market, the Euro note market, and the Euro commercial paper market?

Answer 1

Euro notes are known as short-term notes underwritten by the group of international investment or commercial banks termed as a “facility.”  A client-borrower makes an agreement with a facility in order to issue the Euro notes in its own name for a time period, usually, from three to 10 years.  Euro notes are sold at the discount from face value, and full face value is paid at the time of maturity.  Euro notes usually have maturities of three to six months.  Euro-medium-term notes (Euro MTNs) are normally fixed-rate notes which are issued by the corporation having maturities with a range from less than a year to about 10 years. Just like fixed-rate bonds, Euro-MTNs have a fixed maturity and pay the coupon interest at the periodic dates.  Unlike a bond issue, in which entire issue is brought to the market at once, permission is received for the Euro-MTN issue which is then partially sold on the continuous basis through the facility of issuance which enables borrower to obtain the funds only as required over a flexible basis. Euro commercial paper is an unsecured short-term promissory note which is issued by the corporation or a bank and is placed directly with the investment in the public through a dealer.  Like Euro notes, Euro commercial paper also is sold at the discount from face value.  The maturities range from one to six months.