Friday, 2 October 2015

Matthew Roddan - MTN's

What’s a Medium Term Note?

Medium-term note or MTN is when a debt note maturity period is 5 – 10 years, though technically the repayment duration or maturity period could be less than a year to a 100 years! These debt notes can be issued on floating or fixed coupon basis. Floating rate MTNs are either simple where the coupon is aligned
Euribor +/- basis points or it could be notes with complex structure and linked to indices, swap treasuries, etc.  If they’re issued to investors who aren’t residents of the US, they’re termed "Euro Medium Term Notes". Issuing MTNs to US-based investors calls for a US MTN program.

MTNs can come with fixed maturity date or come with put options, embedded call wherein MTNs could be redeemed per pre-accepted terms or speculations. MTN is usually issued for unsecured investment debts, with fixed rates, though it offers flexibility to both the issuer and investor when it comes to documentation and structure. While many use bank instruments for PPP and have an idea of how MTNs work, many don’t know how it really works! It is funny how they’re rising in popularity and many deploy it for different purposes, without knowing how these instruments work or what it really is! Matthew Roddan of Project Ninety Nine explains MTNs are a great way to get into PPP, especially since not many have the funds required to invest in PPP from their resources. Since PPP is gaining exposure and many would like to know if or not PPPs are what stuffs that make a mythical legend, let’s understand MTNs better.

According to Matthew Roddan, many aspire to invest in PPP but end up being unable to do so by trusting wrong people (brokers) or because they don’t have enough resources. The former is truer and why many think PPPs don’t exist. So, let’s understand MTNs better and how they can be used for PPP. MTNs are instruments of debt issued by banks and are sold to investors with a good face value, annual interest rate and maturity date. So, if you hold a note from Bank of America that’s worth 100 million, with interest rate of 7% each year, you will get 7 million till the instrument matures, after which you can cash it for its worth!

While MTNs are very similar to debt notes, it is more popular because of its price, flexibility, resale potential and option to be bought at a discount instead of its face value. According to Matthew Roddan from Project Ninety Nine, MTNs are available for more than fifty years and can effectively compete with any bank instrument. Since they were available for discounted rate, it became popular after “trading bank instruments” gained notoriety in the secondary market. PPP reign began soon after and Internet has made it even more popular and widely available. If you have an interest in PPP, MTNs Project Ninety Nine are your go-to option.

By Matthew Roddan

Matthew Roddan - Leverage

Leverage ~ An Introduction

Leverage is a technique that’s deployed to multiply one’s losses or profits, typically through buying assets using borrowed funds hoping for more income through asset appreciation, which would eventually trump the interest borrowing entails. However, there could be a risk of borrowing cost trumping the income that asset appreciation could generate, which means the losses would multiply further. Leverage can multiply the profits when the asset bought through borrowing is sold and the returns exceed the costs, though when it goes the other way round, it could multiply the losses. Originally called levering, it is now known as "leveraging" by finance experts. “Leverage” is quite tricky to understand and confusion is partly because of the broad-spectrum use for the word.

Let us understand this in more practical terms with an example. As Matthew Roddan would put it, understanding the nuances of investment and financing is important in the realm of business. That’s one reason why Project Ninety Nine offers a platform to share and discuss the nuances of investing and business. Mortgaging a home is a common scenario. When homeowners mortgage their homes to deal with a financial crisis and keep up the repayments until they’re able to flip it for profits, or redeem themselves from their issues, it is called leveraging.

Not many of us want to get into more debt to come out of a problem, but leveraging is all about taking a calculated risk. Generally, the borrowing and buying of asset is done during a downtime, and the selling of the asset obtained through leveraging is sold when the market is good for a profit. This is done quite often and there are times when it could go wrong, like during the recent economic depression. However, the key to succeed with leverage is making practical assumptions and understanding the risks involved, while making key decisions.

Leverage is not a new concept and has been around for a while, which can be vouched by numerous businesses and individuals who have taken this route. Leveraging usually works when done right and is backed by thorough analysis of possibilities. Investments also work likewise, a reason why investors always ask for a business proposal and financial statement. It is important to understand that businesses are calculated risks and investors often lend or investors after analyzing the possibilities – leveraging profits or managing losses. Understanding the risks involved in investing, Project Ninety Nine started by Matthew Roddan intends to give a platform where investors can discuss, strategize, plan and share knowledge. This way, profitable ventures could be identified, potential entrepreneurs identified and groomed, etc. In short, leveraging is an investment strategy that can propel one’s finances or doom them further, depending on how it is done!


Every one of us utilizes the word commodities regular in some or the other context and realizes what it implies; but in terms of Commodity Trading, most of us don't precisely know how to go about depicting it. Commodities essentially are raw materials utilized for making the completed items that are utilized as a part of our ordinary lives. Wheat and coffee beans, and sugarcane are the raw materials for finished items coffee and bread, and sugar separately. Moreover, cotton & copper are raw materials for materials utilized as a part of apparel, and electric wires are utilized at our homes for charge and in addition in the commercial enterprises. There are several such finished items where a large number of raw materials are utilized. Some of these items are delivered by all the nations and some are created by selective regions relying upon components, for example, the weather, natural resources and so on.
Matthew Roddan says “In commodity trading– the trader identify and distinguish a commodity or set of items that they might want to purchase and offer to procure benefits emerging from the value distinction at which they purchased it; and at which they found themselves able to offer it. A positive contrast is the point at which they purchase a commodity and when its price expands they offer it and the distinction is the benefit they have earned on it; similarly in the event that they purchased something and the cost of that commodity plunges, they will offer that thing at a loss. In spite of the fact that this by means of clarification may look like a simple exercise to some, commodity trading is a tough game to break into”.
After the traders distinguish commodities they then search for organizations that are trading publicly to put resources into those commodities. When enlisted organizations are recognized- trading turns out to be simple. However commodity trading is not appropriate for an average financial specialist with restricted investing plan. Traders before trading with their genuine cash ought to first take a couple of trial runs by means of their demo accounts that their intermediary will furnish them with. Also, traders who are not very sure about trading freely can take the Commodity Trading Advisors approach where professional advisors manage accounts their customers.
Matthew Roddan of Project 99 says “This sort of trading is done on future trade with fates contracts. Commodity trading happens to be exceedingly unpredictable in nature. It can rapidly get to be risky investment on the grounds that it can be influenced by outcomes that are troublesome, or not impossible to anticipate”.
Some of the most common commodities that are traded across the world includes Natural Gas; Crude Oil; Heating Oil; Sugar; Copper; Corn; Wheat; Soybeans; Soybean Oil; Silver; Cotton; Gold; and Cocoa.
Written by Matthew Roddan