Euro Medium Term Note – EMTN

What Is a Euro Medium Term Note?

A euro medium-term note is a medium-term, flexible debt instrument that is traded and issued outside of the United States and Canada. These instruments require fixed payments and are directly issued to the market with maturities that are less than five years. EMTNs allow an issuer to enter the foreign markets more easily to obtain capital. Firms also offer EMTNs continuously, whereas a bond issue, for example, occurs all at once.

Key Takeaways

  • A euro medium-term note (EMTN) is a medium-term, flexible debt security that is issued and traded outside of the United States.
  • EMTNs have become a significant funding source for U.S. and foreign companies, multinational institutions, federal agencies, and sovereign nations.
  • EMTNs offer diversity as companies can issue them in a wide range of currencies and with various maturities.

Understanding the Euro Medium Term Note

EMTN issuers must maintain a standardized document known as a program. The program can be transferred across all issues and has a high proportion of sales through predetermined syndication of buyers. Medium-term notes (MTNs)—notes that bear the same definition as EMTNs, but trade within the United States and Canada—must maintain a different program.

History of Medium-Term Notes

Over the past 10 to 15 years, medium-term notes have emerged as a significant funding source for U.S. and foreign companies, supranational institutions, federal agencies, and sovereign nations. The United States has been issuing MTNs since the beginning of the 1970s after introducing the debt instruments as an alternative to short-term financing in the commercial paper market and long-term borrowing in the bond market. They named these instruments "medium-term" because they serve the middle ground.

MTNs did not gain much momentum until the 1980s when the MTN market shifted from an obscure corner of the market—heavily exploited by auto finance companies—to a fundamental source of debt financing for hundreds of major corporations. Outside the United States, the EMTN market has grown phenomenally and continues to attract new and booming businesses and industries.


EMTNs offer diversity as companies can issue them in a wide range of currencies and with various maturities, typically, up to 30 years although some may have a much longer maturity. Firms can issue EMTNs in collateralized, floating rate (FRN), amortizing, and credit-supported forms. Single issues from an EMTN program are comparable to a Eurobond or a Euro note.

EMTNs, ISINs, and Common Codes

International Security Identification Numbers (ISINs) and common codes are 12-digit security identification numbers. For EMTNs, a specific type of ISIN code is required. The agent of the EMTN program would normally obtain the ISIN numbers and common codes for the relevant EMTN notes on behalf of the issuer. 


The diversity and flexibility EMTNs offer are two of their many benefits. Another benefit is savings. Fixed costs for underwriting make it impractical for corporate bonds to make small offerings; therefore, bonds typically amount to more than $100 million. Conversely, drawdowns from EMTN programs—over one month—typically amount to $30 million. These drawdowns often have varying maturities and specialized features tailored to meet the borrower's needs.

Real-World Example

One example of an EMTN program is that of Telenor; the program was established in 1996. This EMTN program is updated annually and constitutes a standardized master agreement for the issuance of bonds, including private placements and public benchmark bonds.

Article Sources
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  1. Federal Reserve Bank of St. Louis. "Anatomy of the Medium-Term Note Market," Page 1. Accessed Sept. 7, 2020.

  2. International Securities Identification Numbers Organization. "About International Securities Identification Number (ISIN)." Accessed Sept. 7, 2020.

  3. Telenor Group. "EMTN Programme." Accessed Sept. 7, 2020.

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