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Euro Notes IFM

Euro notes are short- to medium-term debt instruments that are legal tender in the eurozone. They come in seven denominations from 5 to 500 euros. The European Central Bank controls the supply of euro notes, which were first issued in 2002 and have various security features to identify genuine notes. Euro notes function as debt instruments in the international financial market and provide a low-cost funding route for companies.

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187 views

Euro Notes IFM

Euro notes are short- to medium-term debt instruments that are legal tender in the eurozone. They come in seven denominations from 5 to 500 euros. The European Central Bank controls the supply of euro notes, which were first issued in 2002 and have various security features to identify genuine notes. Euro notes function as debt instruments in the international financial market and provide a low-cost funding route for companies.

Uploaded by

Riya Charles
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Euro Notes

Euro notes are the legal tender in the form of paper banknotes that can be used
in exchange for goods and services in the eurozone. Euro notes come in seven
denominations: 5; 10; 20; 50; 100; 200; and 500 euros.

The supply of euro notes is controlled by the European Central Bank (ECB), and


the notes were first issued in 2002.
Short- to medium-term debt instrument sold in the Eurocurrency market. A debt
security with a maturity of less than a few years traded in the Eurocurrency
market. This means that the Euro note is denominated in a currency other than th
e one of the country in which it is traded.

Understanding Euro Notes


There are seven euro-denominated banknotes and eight euro coins. The
banknotes, with designs described by the ECB as showing "architectural styles
from various periods in Europe’s history," are identical throughout the euro area,
although euro coins have one side that is country-specific

All euro notes and coins are legal tender in any country within the eurozone,
which at present represents 19 of the 27 countries of the EU. All countries in the
EU with the exception of Denmark, which has opt-out clauses, are expected to
join the euro area eventually

Actual issuance of notes and coins takes place within the Eurosystem, which is
the monetary authority of the eurozone—comprising the ECB and the
national central banks

Various security features will help you recognise a genuine euro banknote. Just
check if:

 The banknote paper is crisp and firm. It feels thicker in some parts.
 The main motif reappears in the watermark and the hologram on the €50,
€100, €200 and €500.
 The value of the banknote appears in the watermark, the security thread,
the hologram and in the colour-changing number

WATERMARK- Hold the banknote against the light and a shadow-like image and
the value numeral become visible.
FEEL OF THE PAPER - It should be crisp and firm. Run your finger across it
and you will feel that the ink is thicker in some parts.

SECURITY THREAD - Hold the banknote against the light and a dark line
running through the banknote becomes visible.

HOLOGRAM - Tilt the banknote. It shows the value of the banknote and the euro
symbol (€).Tilt the banknote. It shows the value of the banknote and a window or
doorway

COLOUR-CHANGING NUMBER - Tilt a €50, €100, €200 or €500 banknote. On


the back, the number changes colour from purple to olive green or brown.

Euro banknotes (or euro notes) are short- to medium-term debt instruments sold
in the Eurocurrency market. Euro notes are similar to euro commercial papers
with the difference that issuers of euro notes don’t have sufficient
creditworthiness to issue normal euro commercial paper. Euro notes are backed
by guarantee facilities such as a note issuance facility (NIF) or a revolving
underwriting facility (RUF).
NIF, a group of banks gives a purchase guarantee or backup credit guarantee to
an issuer in case they are not able to sell the euro notes. Euro notes can also be
issued under an RUF guarantee facility under which the guarantor bank provides
the backup euro note purchase facility while an investment bank handles the
marketing of euro notes.

The other euro note guarantee facilities include multiple options facility (MOF),
global note facility (GNF), and transferable RUF. In the case of an MOF, if the
issuer is unable to sell the euro notes, it can make use of the option to access
six-month financing by different financial products, including the bank loan facility
or banker’s acceptances. GNF offers borrowers the option of switching between
US and euro commercial paper markets. In a transferable RUF setup, each
guarantor bank with prior consent of the borrower can transfer the underwriting
obligations to another bank.

There are two series of banknotes. The first series comprises seven different
denominations: €5, €10, €20, €50, €100, €200 and €500. The second series, or
Europa series, consists of six denominations and was completed with the
issuance of the €100 and €200 on 28 May 2019. The €500 banknote was not
included in the Europa series and as of 27 April 2019 is no longer being issued.
The first series of notes, originally issued in 2002, is gradually being replaced by
the Europa series. All the notes are legal tender throughout the euro area.

Euro Medium Term Note


A euro medium-term note is a medium-term, flexible debt instrument that is traded
and issued outside of the United States and Canada. These instruments require
fixed payments and are directly issued to the market with maturities that are less
than five years. EMTNs allow an issuer to enter the foreign markets more easily
to obtain capital. Firms also offer EMTNs continuously, whereas a bond issue, for
example, occurs all at once.

Euro notes as debt instrument

Euro Notes are like promissory notes issued by companies for obtaining short-
term funds. They emerged in the early 1980s with growing securitization in the
international financial market. As they are denominated in any currency other
than the currency of the country where they are issued. Also, they represent a
low-cost funding route. Documentation facilities are the minimum. They can
easily tailor to suit the requirements of different kinds of borrowers. Investors too
prefer them in view of short maturity. Euro notes are legal tender in the form of a
banknote that can use in exchange for goods and services in the euro
zone. Euro notes come in seven denominations: 5, 10, 20, 50, 100, 200 and
500 euro

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