floating-rate note

(redirected from Floating-Rate Bonds)
Also found in: Dictionary.
Related to Floating-Rate Bonds: 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 ?
We are pleased to be able to support Rnesans Holding in pioneering the floating-rate bond based on TRLIBOR as its benchmark rate which makes it accessible to international investors.
The floating-rate bonds will use the one-year deposit rate, currently at three percent, as its reference rate, the bank said.
The floating-rate bonds would be offered at 25 to 30 bps below the three-month Saudi interbank offered rate for five years, 10 to 15 bps below for seven years and flat to 5 bps above for 10 years.
The sale, which was executed via the Sandown Gold collateralised-loan-obligation platform, included GBP428m and EUR311m triple-A rated, floating-rate bonds, priced at par with a spread of 170 basis points over three-month Libor, and 160 basis points over three-month Euribor, respectively.
43bn) worth of seven-year fixed-rate bonds, and CNY10bn worth of five-year floating-rate bonds on Wednesday, reports Dow Jones.
The debt is indexed to the Euribor and will gradually substitute the CCT floating-rate bonds, the Ministry added.
This new platform will be open to all regulated institutions authorized to operate in Europe and seeking to trade, among professionals, fixed and floating-rate bonds denominated in euros and issued by non-sovereign issuers.
For individual investors, the ministry has so far issued only five-year fixed-rate government bonds and 10-year floating-rate bonds.
Treasury responded with floating-rate bonds, including Series EE bonds targeted at small investors.
The floating-rate bonds will be denominated in euros and sterling, and sold via the bank's Sandown Gold collateralised loan obligation platform.
They will comprise of up to CNY15bn worth of fixed-rate bonds, and up to CNY15bn worth of floating-rate bonds using the one-year deposit rate as reference, it said.
6bn batch with a coupon of 40 basis points above yen swaps and a JPY32bn tranche of floating-rate bonds with a coupon of 55 basis points above three-month yen Libor.