convertible floating-rate note

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Convertible Floating-Rate Note

A debt security with a floating interest rate that may be exchanged for another debt security with a higher, fixed interest rate. Most floating-rate notes expose holders to the risk that declining interest rates will reduce their returns. A convertible floating-rate note protects holders by giving them the option to lock-in their return, should interest rates fall significantly.

convertible floating-rate note

A floating-rate note that gives the holder the option of exchanging it for a longer-term debt security with a specified coupon. Unlike a regular floating-rate note, the convertible feature protects investors against declining interest rates.
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