floating-rate note

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Related to Floating-Rate Bonds: Variable Rate Bond

Floating-rate note (FRN)

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
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.
References in periodicals archive ?
Floating-rate bonds are relatively new to REIT capital structures.
The floating-rate bonds will use the one-year deposit rate, currently at three percent, as its reference rate, the bank said.
The total amount in dispute between the two creditors was less than $3.5 million; pursuant to the interpleader agreement, Citibank deposited $3,157,000 in floating-rate bonds and $421,665.91 in cash.
India-based Power Finance Corporation (Power Finance) (BSE: 532810) has asked for bids from arrangers for floating-rate bonds maturing in three years and 10 years, according to certain sources.
When investors dumped the county's floating-rate bonds, interest rates surged as high as 10 percent.
So she's shortened the over all maturity of her portfolio, bought international fixed-income securities, and added some floating-rate bonds that respond quickly to rising rates.
The float will comprise 95.2 trillion rupiah in floating-rate bonds and 8.7 trillion rupiah in fixed-rate bonds providing 12 to 14 per cent returns, which will recapitalise 23 ailing banks.
Chicago: US REITs are selectively turning to floating-rate bonds as earnings growth wanes and fixed borrowing costs rise, against the backdrop of strong bond investor demand for floating-rate paper, according to Fitch Ratings.
The floating-rate bonds would be offered at 25 to 30 bps below the three-month Saudi interbank offered rate for five years, 10 to 15 bps below for seven years and flat to 5 bps above for 10 years.
The sale, which was executed via the Sandown Gold collateralised-loan-obligation platform, included GBP428m and EUR311m triple-A rated, floating-rate bonds, priced at par with a spread of 170 basis points over three-month Libor, and 160 basis points over three-month Euribor, respectively.
The five-year floating-rate bonds, rated AA by China Chengxin International Credit Rating, will be placed at a face value, with the coupon to be set during the book-building procedure.