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 ?
Variable rate bonds offer the opportunity to lower the cost of capital for long-term capital improvement financing and have some inherent advantages:
In the event that variable rate bonds are put back to the bank and are in the bank bond mode, the additional costs become general obligations of IHFA.
The 'AA' long term rating on the series 2001A fixed rate bonds and 2001B variable rate bonds are supported by the Nelson Gallery Foundation's substantial level of reserves.
1 million outstanding 2005 series A through C, 2004 series A through I, 2003 series A through G, 2002 Series A through G, 2001 series A and 2000 series C through G, class I variable rate bonds at 'AAA/F1+' and class I fixed rate bonds at 'AAA';
The new facility includes a $60 million revolving credit facility for general corporate purposes and a $341 million letter of credit facility to support $329 million aggregate principal amount of tax-exempt variable rate bonds.
4 million outstanding 2005 series A, 2004 series A through I, 2003 series A through G, 2002 Series A through G, 2001 series A and 2000 series C through G, class I variable rate bonds at 'AAA/F1+' and class I fixed rate bonds at 'AAA';
2 million outstanding 2004 series A through I, 2003 series A through G, 2002 Series A through G, 2001 series A and 2000 series C through G, class I variable rate bonds at 'AAA/F1+' and class I fixed rate bonds at 'AAA';
The 'A+' long-term rating is an underlying rating as these variable rate bonds are expected to be insured by CIFG IXIS Financial Guaranty with a standby bond purchase agreement from DEPFA BANK plc.
The series 2005A bonds will be issued as variable rate bonds, initially sold in the weekly mode, and are expected to sell on or about Feb.
50,000,000 Geisinger Health System variable rate bonds, series 2002;
Each covenant violation allows the LOC provider to exercise certain remedies, including the right to initiate a mandatory tender on the outstanding variable rate bonds.
The effect of the swaps is to create index pricing for FGU participants instead of the fixed price of the prepaid gas that will be embedded in the variable rate bond transaction at closing.

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