Since the global financial crisis in 2008, interest rates have been very low. That means today’s big net worth investors are looking for a place to invest money for high returns.
Project developers, entrepreneurs, and investors who are looking to raise capital or who are looking for investment opportunities that offer higher returns for themselves or their clients are contacting consultancy specializing in Trade finance and commodities.
With the PPP trade program, the investor, entrepreneurs, and brokers are free to use the profits they like. A PPP trade program includes MTN Buy-Sell Program, which is a debt security that allows investors to fulfill their financial goals.
What is an MTN (Medium-Term Note)?
MTNs are an essential aspect of Private Placement Programmes (PPP), as they are often traded to generate a high amount of profit.
Investors in PPP are classified as High Net-Worth Investors, so they are not widely promoted. The lack of promotion means that there is a lack of knowledge of MTN investment opportunities.
- When a large financial institution or a big company seeks a loan, they may issue a debt note (MTN) to raise funds. MTN, not a bond, is an alternative source of financing to bank lending continuously.
- MTN is attractive because it offers remarkable flexibility in raising funds for companies, as they are customizable to meet the requirement of the issuer.
- MTNs can be issued on either a floating or fixed coupon basis, have a complicated structure, or may have several maturity dates based on their predefined structure.
Here are some essential features about MTN that you should know:
- A fixed-term offering is generally 2 – 5 years. However, the term can be set by the issuer, and it can be shorter than one year or as long as 100 years.
- Interest rate is fixed or subject to a floating coupon rate
- You cannot trade them on the stock exchange
- There is a specified minimum amount
- 100% repayment by a financial institution on the pre-agreed expiration date.
As an investor, how can you earn money through MTN’s?
MTNs feature in Private Placement Programmes, and PPP typically function on an arbitrage-based trading strategy, which takes advantage of setting up a simultaneous Buy and Sell Transaction where the price difference benefits the investors.
This trading approach is excellent for trading MTN’s, as traders can purchase MTN from financial institutions at a discounted rate and sell it at a higher price than they bought them for, while still discounted from their original value.
The price difference allows both the buyer and the seller to make a return on the MTN. The last buyer in this cycle holds the MTN till its expiration date. By applying this strategy, investors and traders make a huge profit from MTN’s.
How to Buy MTN?
The MTN Buy-Sell Program is generally brokered through professional consultancy specializing in trade finance and commodities. If you are an investor looking to maximize your returns from your investment portfolio, look for a well-established consultancy firm.