floating-rate note

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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 ?
In a statement to the Australian Stock Exchange, the bank said that the sale, which included AUD590m of fixed-rate bonds and AUD110m of floating-rate securities, were priced to yield 275 basis points more than the three-month bank bill swap rate.
6 /PRNewswire/ -- Standard & Poor's today lowered its rating to 'BBB+' from 'A-' on the $475 million limited recourse secured floating-rate securities series 2-B issued by Sovereign Investment Securities Two Ltd.
29 /PRNewswire/ -- Standard & Poor's today placed its 'A-' rating on the $475 million limited recourse secured floating-rate securities series 2-B issued by Sovereign Investment Securities Two Ltd.
Guidelines for Rating Secondary Market Synthetic Floating-Rate Securities
5 million class A floating-rate securities, and its preliminary single-'A' rating to the $67.
The Securities are further secured by other trust assets that include the reserve account as well as the proceeds of the interest rate cap (for the benefit of the floating-rate securities only) provided by Nationsbank.
The cash flow score is more heavily weighted for short-duration (WAL less than 10 years) non-floater tranches than for long-duration or floating-rate securities, reflecting the relative impact of WAL variability on each category.
Applicable Criteria and Related Research: Guidelines for Rating Secondary Market Synthetic Floating-Rate Securities http://www.
rpt_id=548588 Guidelines for Rating Secondary Market Synthetic Floating-Rate Securities http://www.