Floater (redirected from Eye floater)

Floater

A bond whose interest rate varies with the interest rate of another debt instrument, e.g., a bond that has the interest rate of the Treasury bill +.25%.

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floater

See floating-rate note.

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Floater

Informal for a floating-rate note (FLN). A bond with a variable interest rate. These bonds typically have coupons renewable every three months and pay according to a set calculation. For example, a note may have an interest rate of "EURIBOR + 1%" and pay whatever the EURIBOR rate happens to be at the time plus 1%. Some FRNs have maximum and minimum interest rates, known as capped FRNs and floored FRNs, respectively. An FRN with both a maximum and a minimum interest rate is called a collared FRN. In the United States, government-sponsored enterprises issue most FRNs, while banks do the same in Europe. See also: Adjustable-rate mortgage.