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 ?
33,000,000 class C floating-rate notes 'AA' due 2052;
13,051,481 class III floating-rate notes downgraded to 'BB' from 'BBB';
34,000,000 class B fourth priority deferrable secured floating-rate notes due 2042 'AA';
19,517,000 class D floating-rate notes due September 2047 'A-';
70,725,000 Class B Fourth Priority Senior Floating-Rate Notes Due April 2047 'AA';
103,000,000 class B deferrable third priority secured floating-rate notes due 2037 'AA';
100,000,000 class A-5 fifth priority senior secured floating-rate notes due 2048 'AAA';
12,600,000 class D variable floating-rate notes due 2046 'AA-';
26,000,000 class A3 secured deferrable interest floating-rate notes due 2045 affirmed at 'A';
28,500,000 class IV floating-rate notes due 2052 'AA-';
34,125,000 class II secured floating-rate notes due 2009 upgraded to 'AAA' from 'AA';
8,500,000 Class A-1LB floating-rate notes affirmed at 'AAA';