floating-rate note

(redirected from Variable Rate Bond)
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Related to Variable Rate Bond: Frn, Floating Rate Securities

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 ?
A variable rate bond is a coupon-paying bond where the coupon interest rate is tied to a common market rate.
The Company was late in making its most recent semi-annual Variable Rate Bond interest payment.
Certain holders of a significant amount of the Variable Rate Bonds have informally indicated their willingness to favorably consider the proposed exchange offer and/or a modified version thereof whereby the cash portion of the offer would be eliminated and replaced with 265 additional shares of the company's Common Stock for each Variable Rate Bond exchanged.
Mark Page, executive director of the New York City Municipal Water Finance Authority, said, "The Water Authority believes that its new variable rate bond program will not only diversify investor interest for its billion dollar a year capital program but will also contribute over time to the Authority's objective of holding down the size of required water rate increases by accessing a lower cost source of capital.
In the event that variable rate bonds are put back to the bank and are in the bank bond mode, the additional costs become general obligations of IHFA.
48 per share and pay interest on the variable rate bonds resulting in a coupon rate of 16 percent to 23 percent.
The additional financings consist of $213 million in variable rate bonds with a swap into fixed rate, and $322 million in variable rate bonds.
4 million of RS series 2001A variable rate bonds and $100 million of PUF notes.
The short term 'F1+' rating affirmation on the outstanding variable rate demand reflects the level of investments that would be available in the event of a failed remarketing of the variable rate bonds (VRDBs).
The circumstances under which the variable rate bonds may convert early to a fixed rate, retroactive to the previous interest payment date, are specified in the bond documents.
Novant currently has one swap transaction in effect with a notional amount of $135 million to hedge its series 2004A and 2004B variable rate bonds.
The series 2001B variable rate bonds also have a short term rating of 'F1+' due to a standby bond purchase agreement with JP Morgan Chase Bank N.

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