floater


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Floater

A bond whose interest rate varies with the interest rate of another debt instrument, e.g., a bond that has the interest rate of the Treasury bill +.25%.

Fairway Bond

A bond with a coupon that is linked to some short-term benchmark interest rate. That is, a fairway bond carries a variable interest rate that changes according to a specified short-term interest rate. For example, a fairway bond may have a coupon of LIBOR + 0.5%. When investors believe interest rates will soon rise, they have an incentive to stay out of the bond market because their return would be locked at the lower interest rate. Fairway bonds reduce this incentive by allowing investors to take advantage of higher interest rates as they occur. A fairway bond is also called a floater. See also: Inverse floater.

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.

floater

References in periodicals archive ?
What is your opinion as to when coverage ceases on the installation floater and needs to be covered under a builders risk form?
Although floaters are usually harmless, they can be associated with a retinal tear or detachment; if this is the case, you'll see a shower of floaters and spots that may be accompanied by light flashes and loss of peripheral vision.
These Included glaucoma; cataracts; retinal tear and detachment; retinal hemorrhages; visual field defects; and increased floaters.
We already asked the assistance of local police to confiscate the [dredge floater assembly] parts from the junk shops, he said.
The solution to these problems, especially when the objects involved are valuable or sensitive to mishandling, may be to secure a true installation floater policy.
My floater and flashes continue after taking HA for five months.
Many installation floaters exclude any loss or damage during testing.
For example, if you own an item or a collection your insurance company doesn't have experience in covering, your request for a floater might be denied.
Interestingly, the yield variance between a quarterly resetting floater and a 90-day money-market instrument is not so much due to greater risk but to market inefficiency caused by a smaller universe of informed buyers.
short-term rates are lower than long-term rates, it is expected that, on average, the yield provided to the holder of an inverse floater will be higher than the yield available on a "plain vanilla" fixed-rate bond.
The long-term 'AAA', Stable Outlook rating assigned to the series 2008-3312 floaters and residuals is based on the rating that Fitch has assigned to the State of Texas highway improvement general obligation bonds, series 2012A, term series 2012A bonds (rated 'AAA', Stable Outlook) that have been deposited in the trust.
New York: Fitch Ratings has assigned the following ratings to the Floater Certificates, Residual Certificates, Puttable Floating Rate Receipts (Floater Receipts) and Inverse Floating Rate Receipts (Residual Receipts), of the Tender Option Bond Trust series listed below: