Euro Medium Term Notes (EMTN)

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Definition of 'Euro Medium Term Notes (EMTN)'

A Euro Medium Term Note (EMTN) is a type of bond that is issued in euros and sold to investors outside of the eurozone. EMTNs are typically issued by corporations, governments, and supranational organizations. They are typically issued with maturities of one to five years, but can be issued with maturities of up to 10 years.

EMTNs are a popular way for issuers to raise capital in euros. They are typically less expensive to issue than bonds that are denominated in other currencies, such as U.S. dollars. This is because the euro is a relatively stable currency, and there is a large pool of investors who are willing to buy euro-denominated bonds.

EMTNs are also a popular way for investors to gain exposure to the euro. They can be used to diversify a portfolio and to hedge against the risk of a decline in the value of the euro.

EMTNs are typically issued under a prospectus, which is a document that provides information about the bond issue. The prospectus includes information about the issuer, the terms of the bond, and the risks associated with investing in the bond.

EMTNs are traded on the secondary market, where they can be bought and sold by investors. The price of an EMTN will fluctuate based on the supply and demand for the bond, as well as the interest rate environment.

EMTNs are a relatively safe investment, but they do carry some risks. The main risk associated with EMTNs is the risk of default. This is the risk that the issuer will not be able to repay the bond. The other main risk associated with EMTNs is the risk of currency fluctuations. This is the risk that the value of the euro will change relative to the value of the investor's home currency.

EMTNs can be a good investment for investors who are looking for a relatively safe way to gain exposure to the euro. However, investors should be aware of the risks associated with EMTNs before investing.

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