Briefly EXPLAIN the following – i. Fully Hedged Bonds ii. Medium Term Notes iii. Floating Rate Notes iv. Euro Commercial Papers

(i) Fully Hedged Bonds: In foreign bonds, the risk of currency fluctuations exists. Fully hedged bonds eliminate the risk by selling in forward markets the entire stream of principal and interest payments. (ii) Medium Term Notes (MTN): Certain issuers need frequent financing through the Bond route including that of the Euro bond. However, it may be costly and ineffective to go in for frequent issues. Instead, investors can follow the MTN programme. Under this programme, several lots of bonds can be issued, all having different features e.g. different coupon rates, different currencies etc. The timing of each lot can be decided keeping in mind the future market opportunities. The entire documentation and various regulatory approvals can be taken at one point of time. (iii) Floating Rate Notes (FRN): These are issued up to seven years maturity. Interest rates are adjusted to reflect the prevailing exchange rates. They provide cheaper money than foreign loans. (iv) Euro Commercial Papers (ECP): ECPs are short term money market instruments. They have maturity period of less than one year. They are usually designated in US Dollars.