Debt security
Types of debt securities:
Senior
Pari passu
- Bond: A bond is a debt security, traditionally bearing a fixed rate of interest, and issued as a stand-alone (rather than off an MTN programme).}
- Note: A note is a debt security, traditionally bearing a floating rate of interest, and issued as a stand-alone (rather than a medium term note, which is issued off an MTN programme).
- Medium term note (or “MTN”): A medium term note is a debt security, which may bear a fixed or floating rate of interest (or some other kooky derivative payoff), and is issued off an MTN programme). At one time, MTNs were typically issued only for a medium term — up to about 5 years — but that's all gone now. They still get called medium term notes though. In practice standalone bonds and notes are far less common these days, because they’re such a faff to issue and list, whereas MTNs are much easier and do pretty much the same job. I know how much you love a metaphor, so think of bonds and notes as broadsheet newspapers, and MTNs as an android app.
- Convertible bond: