floating-rate note

(redirected from Floating Rate Securities)
Also found in: Dictionary.
Related to Floating Rate Securities: Variable Rate Bond

Floating-rate note (FRN)

Floating-Rate Note

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.

floating-rate note

An unsecured debt issue with an interest rate that is reset at specified intervals (usually every six months) according to a predetermined formula. Floating-rate notes usually can be redeemed at face value on certain dates at the holder's option. Floating-rate notes pay short-term interest and generally sell in the secondary market at nearly par value. Floating-rate notes are indicated in bond transaction tables in newspapers by the symbol t. Also called floater, variable-rate note. See also convertible floating-rate note, droplock bond, variable-rate demand obligation, yield curve note.
References in periodicals archive ?
But, he cautions that investors need to more fully understand floating rate securities in order to select the appropriate floating rate fund.
Hillmeyer emphasizes that the manner and amount of floating rate securities in the overall portfolio are specific to the individual, but with the disclaimer out of the way, he says, generally, 5% to 15% is an appropriate target.
Janus Adviser Floating Rate High Income Fund seeks to provide high current income by investing at least 80% of its assets in floating rate loans and other floating rate securities.
Because they are generally considered non-investment grade, floating rate securities may be more sensitive to economic changes, political changes, or adverse developments specific to the borrower than higher quality investments and should be considered speculative.
One Hundred percent of interest rate risk due to leverage is hedged using interest rate swaps and floating rate securities that have a weighted average life of 3.
The notes are floating rate securities, with an issuer call option and investor put option.
50 percent Securities and Floating Rate Securities, the "Securities").
The majority of the proceeds from the sale will be used to redeem high cost, short-term borrowings and approximately $20 million will be used to purchase floating rate securities.
8 billion), 57% of which were floating rate securities and 21% were seven-month fixed-rate securities.
One Hundred One percent of interest rate risk due to leverage is hedged using interest rate swaps and floating rate securities that have a weighted average life of 5.