What is a {term}? Euro Medium Term Note - EMTN

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 foreign markets more easily to obtain capital. Firms also offer EMTNs continuously, whereas a bond issue, for example, occurs all at once.

BREAKING DOWN Euro Medium Term Note - EMTN

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 throughout a predetermined syndication of buyers. Medium-term notes — notes that bear the same definition as EMTNs but are traded 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 are emerging 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, amortizing and credit-supported forms. Single issues from an EMTN program can be compared to a Eurobond or a Euro note.


The diversity and flexibility of 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 a one-month period — typically amount to $30 million. These drawdowns often have varied maturities and specialized features tailored to meet the borrower's needs.