Index Amortizing Note - IAN

Index Amortizing Note - IAN

A type of structured note whose payment schedule is determined by the behavior of interest rates.

Notes:

Similar to the maturity of a collateralized mortgage obligations, the maturity of an index amortizing note extends when interest rates rise and shortens when interest rates decline. Some investors, however, choose IANs as an alternative to CMOs since IANs are exposed to less extension and contraction risk.

See also: Collateralized Mortgage Obligation - CMO, Contraction Risk, Equity-Linked Note - ELN, Extension Risk, Floating Rate Note - FRN, Index Amortizing Swap, Note, Structured Note