floating debt(redirected from Floating Debts)
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Short-term debt that is renewed and refinanced constantly to fund capital needs of a firm or institution.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Short-term debt that a company refinances continuously. A company may utilize floating debt instead of long-term debt because short-term loans have lower interest rates. Also, if interest rates fall, the company will be able to refinance at a lower rate to reduce its expenses. The risk of floating debt is the possibility that interest rates will rise, increasing the company's expenses.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Short-term debt that is subject to continual refunding by the issuer.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.