What is the meaning of "MTN notes" (Medium term notes) ?

Answer 1

Medium Term Notes refer to a special kind of bond that can be tailored to the needs of the purchaser.

The issuing company registers a certain amount of the debt with the SEC -- but does not issue the debt. This is called "Shelf Registration." The investment bank then uses this as inventory. When someone wants to buy debt with a maturity of 5-10 years, the I-Bank can offer the MTM. They will sell the amount that the investor wants to buy (up to the limit) and will structure the maturity based on the needs of the investor and set the coupon using prevailing rates.

The advantages to the issuer: Since the sale is spread out over time, they can get fair rates. If they issued all of it at once, they increase the supply too quickly and depress the price. They also save on issuing costs, since the shelf registration is cheaper to do than a series of registrations.

The advantages to the I-Bank: They have inventory without having to take on the interest rate risk of holding inventory. They can sell it more easily, because they are able to tailor the deals to suit the buyers.

Advantage to the purchasers: They get a fair rate on a bond tha matches their exact needs. If they want a 5-year bond, they get it -- if they want a 7-year bond, they get it. One negative is that the MTMs are not as liquid as other bonds -- but this is rarely a problem for large portfolio managers.

Answer 2

A note is usaully a structured financial product. It contains values, with terms, such as expiration date, notional principal amount, conditions.........etc.

You may take it as some kind of bond, but is not issued by government, but investment bank, usually it restructured the cash flow, payment date, and maybe in an universe form that is tailored made to investors.