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Own an MTN? Don't Sell It!!! LEVERAGE IT!

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there are some things that MTN’s can be used for that greatly produce much higher returns when they are used for leverage. In fact, they can be collateralized and used to support systems that can generate a profit to the owner far greater than merely buying and selling them to make a spread.

Published in: Economy & Finance
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Own an MTN? Don't Sell It!!! LEVERAGE IT!

  1. 1. Don’t “Sell” That Bank-issued Medium- Term Note! Leverage it Instead! have a place in the financial world, as many people in the business know. But there are some things that MTN’s can be used for that greatly produce much higher returns when they are used for leverage. In fact, they can be collateralized and used to support systems that can generate a profit to the owner far greater than merely buying and selling them to make a spread. For the uninitiated, by definition, Medium Term Notes ( MTN 's) are debt instruments which are created by banks and sold to investors, having a predefined face value, date of maturity, and annual interest rate. For example, you may have a 10-year note issued from Barclays Bank worth 100M, collecting a coupon (interest) of 6.5% per year. That may be enough of a return for institutional investors until they figure out how leveraging the MTN can produce many times that amount through use of a regulated system. That’s the purpose of this article. There is not enough space here to provide specific details (WHICH ARE DISCLOSED ONLY TO THE QUALIFIED BENEFICIAL OWNER OF ONE OF THESE INSTRUMENTS). However, there are people who are holding some of these assets and looking to sell them for whatever they can get. Of course, these instruments are regulated and can only be handled by licensed brokers to re-sell. The point is, if an MTN can be used to increase many times over the coupon rate AND the spread should you sell it to a secondary buyer, a little digging can help uncover how this particular system works. If you own one of these and can prove ownership, a quick email will open the conversation. Describe the face value, issuing bank, maturity date when contacting us. ALL INFORMATION IS TREATED WITH CONFIDENCE, DISCRETION, AND NON-DISCLOSURE.

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