floating-rate note

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Related to Floating-rate bond: zero coupon bond, Variable Rate Bond

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 ?
The European Bank for Reconstruction and Development (EBRD) is moving to deepen Turkeys local capital markets as Ronesans Holding, one of the countrys largest construction and infrastructure companies, issues its first Turkish lira-denominated floating-rate bonds of three-year maturity.
The debt is indexed to the Euribor and will gradually substitute the CCT floating-rate bonds, the Ministry added.
The second portion of floating-rate bonds amounts to JPY25bn and matures on 9 September 2013.
Interest payments on floating-rate bonds change annually, reflecting market interest rates.
The second issue features a floating-rate bond to the tune of JPY32.
The statement came after Reserve Bank of India said that it will sell INR30bn of a 2020-dated floating-rate bond as part of the government's INR120bn borrowing programme on Friday.
The floating-rate bond issue, to pay 47 basis points over three-month BBSW, was lead-managed by ANZ and Westpac Institutional Bank.
The floating-rate bonds will pay 250 bps over the same benchmark, capped at 1 percent above the interest paid on the fixed-rate bonds, the report said.
6 million in floating-rate bonds that were due in 2016 using proceeds from the sale of assets.