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 ?
115,500,000 class A-2 floating-rate notes 'AAA' due 2052;
56,000,000 class I-A floating-rate notes affirmed at 'AAA';
100,000,000 class A1-B second priority senior secured floating-rate notes due 2042 'AAA';
35,131,000 class B floating-rate notes due September 2047 'AA';
27,225,000 class A-2 floating-rate notes affirmed at 'AAA';
240,000,000 Class A-2 Second Priority Senior Floating-Rate Notes Due April 2047 'AAA';
430,000,000 class A-1 first priority senior secured floating-rate notes due 2037 'AAA';
250,000,000 class A-3 third priority senior secured floating-rate notes due 2048 'AAA';
90,000,000 class A-2 variable floating-rate notes due 2046 'AAA';
60,300,000 class B floating-rate notes due 2041 'AA+';
140,000,000 class A1S senior secured floating-rate notes due 2045 affirmed at 'AAA';
21,375,000 class VII deferrable floating-rate notes due 2052 'A-'.