Bond medium term

What is a medium term bond?

A medium term bond is a bond e.g. pays interest on a loan and pays back the loaned money at the end of the maturity. Bonds with medium term lifetime usually have a lifespan of 3 to 10 years. Often these can also be bought and sold via the stock exchange.

Examples of medium term bonds:

USA: Treasury Notes which have a life time that ranges from 2 to 10 years. Interest is paid every 6 months and the original amount is paid back at the end of maturity.

Germany: 'Bundesschatzbriefe' have a life time of 6 years. There exist two types, type A where the interest rates is paid every year and type B where the interest payment is added to the loan each year and the total amount (original money + interest payments) is paid back at the end of the bonds life.

UK: 'Gilts' are bonds, those with a life time of up to 7-15 years are called medium.

France: BTAN (Bon à Taux Annuel Normalisé) are bonds which range in the maturity of 1 to 6 years, they pay interest each year.