Custom «EMTNs and MNEs» Essay Paper Sample
Multinational enterprises (MNEs) are corporations, which offer services or goods to more than one nation this is according to Muchlinski (1999). Some of these multinational enterprises include Microsoft Corporation, British airways etc. EMTN or euro medium term notes are programs that provide a platform for using standard documentation structure for having access to funds from capital markets or be able to offer debt investments. EMTN allows issuing of notes that are in different denominations, interest rates, and currencies.
Medium term notes have some advantages that are very attractive to multinational enterprise. One most important aspect of EMTNs is that one can issue a bond that has the exact characteristics that an in investor requires; it is possible for the EMTN issuer to pay less yield by issuing the EMTNS. Mostly EMTNs go on sale in small quantities, and it happens so sporadically. This aspect makes EMTNs to be difficult to predict its demand. The flexibility of EMTNs allows an issuer enjoy temporary market opportunities, because one can easily acquire an EMTN with certain characteristics. Another important fact is that EMTNs allows discreet financial support since it is only the agent, issuer, and an investor need to agree. This helps the issuer, for example, a multinational corporation to avoid huge public offering, which may point out that the corporation has some financial distress.
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In conclusion, the above advantages make EMTNs have more popularity to MNEs than other forms of financing. Furthermore, EMTNs have another advantage that helps the investors a lot. For instance, an investor may ask for an EMTN that matures at the time when the investor may require paying huge sums of money or may be the investor or a corporation has a floating interest rate requires quarterly payment. This makes an EMTN a very useful tool that an investor or a multinational corporation may gain from using.