floating-rate note

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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 ?
100,000,000 class A-2 third priority senior secured floating rate notes due 2042, 'BB' placed on Rating Watch Negative;
26,799,000 class B6 Floating Rate Notes, Due February 2039 'A-';
26,875,000 class C Deferrable Interest Floating Rate Notes Due 2047 'A+';
USD87,500,000 class B-1 secured floating rate notes due 2051 'AA';
US$18,500,000 class E sixth priority mezzanine deferrable secured floating rate notes due 2046 'BBB';
USD5,000,000 class IA secured floating rate notes due 2013, 'AAA';
22,500,000 class D-1 sixth priority secured deferrable floating rate notes due 2041 'A-';
25,000,000 class D Fifth Priority Mezzanine Deferrable Floating Rate Notes Due November 2046 'A';
85,000,000 class A1 senior secured floating rate notes due 2046 'AAA';
EUR20,000,000 class IC secured floating rate notes due 2013 'AAA';
193,200,000 class A-1 senior secured floating rate notes due July 2016 'AAA';
175,000,000 class A-1S1 senior secured floating rate notes due September 2046 'AAA';