Market Trends 2018/19: Medium-Term Note Programs

This market trends article examines recent trends regarding medium-term note programs (MTN programs), providing an overview of the market in 2018 and 2019 with a focus on general deal structure and process, recent deal terms, and disclosure trends. Financial service companies, such as bank holding companies, continued to use medium-term note programs as their vehicles for issuing large, underwritten offerings of notes as well as structured notes in 2018. Two significant changes occurred in 2018 and early 2019: the addition of new provisions to underwriting, distribution, and dealer agreements in order to comply with the QFC Stay Rules applicable to U.S. global systemically important banking organizations (GSIBs), as further described below, and the finalization of new fallback language to be added in new issues of floating rate notes with U.S. dollar LIBOR (USD LIBOR) as a base rate, in anticipation of the potential cessation of LIBOR in 2021.