EMTNs

EMTN stands for Euro Medium Term Note, but the name can vary based on the country or region in which it is issued. It is a type of debt security issued by entities both within and outside the European Union, typically by banks, corporate entities, or sovereign lending countries.

EMTNs are usually floating rate notes with a medium to long term maturity period, ranging from a few years to anywhere up to 30 years. They can be denominated in various currencies, including the Euro, United States Dollar, and other major currencies. EMTNs are generally issued in large blocks and can be further sub-divided, making them a popular instrument for raised capital.

The EMTN programme is usually agreed upon between the issuer and a bank or other financial institution, established to manage the issuance of the notes. Once in place, the issuer can issue EMTNs on an ongoing basis. Coupon payments are usually linked to short-term interest rates, making the product sensitive to market conditions.

These securities are traded on debt markets as they typically comply with the International Capital Markets Association (ICMA) Conduct of Business Rules and sometimes the relevant Euroclear-Clearstream Settlement Procedures. EMTNs are mainly used for refinancing and funding an issuer's capital needs. They are also used to finance large projects and can provide specified liability profiles.

EMTNs have grown in popularity in recent years, especially as European issuers increased their use of the program structure, especially around Euro-denominated exposures.