How MTN buy/sell programs work.Tips and tricks of private placement programs

After working for years in association with European private bankers I have garnered some knowledge about how MTN buy/sale opportunities which are popularly known as high yield programs or private placement programs work.

The basis of any legitimate trade program is medium term note( MTN) buy sale opportunities. MTNs are banking instruments with a fixed maturity value. It also normally has a coupon associated to it which is the yearly interest yield. These MTNs are issued by the top banks to raise cash off balance sheet and thus these don't get reported in the audited balance sheets of the banks.

Fresh cut MTNs or just bank issued MTNs are extremely difficult to get for private buyers and are mostly reserved for humanitarian foundations which have licensed traders. These licensed traders buy these fresh cut instruments at price range of 20%-25% and get them enlisted into the Euroclear system so that it gets an international security identification number (ISIN). These MTNs with ISINs are then sold off immediately to exit buyers at 40%-45%. The exit buyers are normally pension funds, hedge funds, sovereign funds or ultra-high net worth individuals.The exit buyers can seldom buy fresh cut MTNs and therein comes the proficiency of a licensed trader.

The profits generated through these are exponentially high but a lion share of the profits goes for humanitarian projects and the rest is shared between the investor, the trade organizers and the intermediaries. Traders or program organizers always need a client as they can only do the trades on behalf of a client and not for themselves.They can't also solicit for clients. So the only way to get into these opportunities is through associated intermediaries.

The traders generate a credit line for buying and selling MTNs by blocking the funds of the client. The client's funds are not put at risk as those are for show purposes for the regulators to approve the credit lines. The trader normally gets a MT799 bank payment undertaking of 40% to 45% from an exit buyer and based on that issues a MT799 bank payment undertaking of 20% to 25% to the selling bank. So the mechanism is used to flip the instrument within a day or two with incredible profits.

The best way to get into these trade opportunities is through a tear sheet wherein the client's banker needs to send a tear sheet of the account signed by 2 bank officers to the trade organizers. Based on that tear sheet the credit line of the trader is triggered.In case a tear sheet option is not available then an internal block or admin hold is the other choice. In other scenarios a MT799 block might be necessary for the blocking of the funds to get into trade. Clients should always get into trade through the above mentioned options. Under no circumstances should they transfer funds to a trader's account or a subaccount. Though a subaccount is in the name of the client but the parent account owner can withdraw the money from the subaccount. Also a MT760 should never be used because in case the MT760 is callable then the money can be withdrawn from the account.

For further information feel free to reach out.

Regards

Kishaloy

Whatsapp 0091-9830112079

skype kishaloyandnicoleta

Email [email protected]

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