floating-rate note

(redirected from Variable-Rate Bonds)
Also found in: Dictionary.
Related to Variable-Rate Bonds: Floating Rate Bonds

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 ?
Randall Dauby, CEO of Hamilton Memorial Hospital in rural McLeansboro, 111., has had this troubling scenario in the back of his mind since 2008, when the hospital financed a major redevelopment and expansion with $18.5 million in variable-rate bonds backed by a bank-authorized LOC, which expires in November 2012.
The partnership interests were referred to as synthetic tax-exempt variable-rate bonds. Eligible partnerships were allowed to make an election to permit consenting partners to take into account their partnership income on a monthly basis.
For example, basis risk describes the risk in a fixed payer swap that the floating rate received by the issuer under the interest rate swap may not equal the floating rate paid by the issuer on the variable-rate bonds that it is hedging.
The district's debt structure includes approximately $74 million in variable-rate bonds with a five-year initial fixed-rate term set in 2016, a soft put back to bondholders in lieu of liquidity support, and the option to periodically reset the rate to a long-term fixed basis.
Variable-Rate Bonds can be redeemed annually and Step-Up Bonds are redeemable semi-annually.
The company had initially filed to issue fixed- and variable-rate bonds worth a combined MXN7.5bn.
Of the HDC financing approved today, $60.3 million will come from the sale of tax-exempt and taxable, fixed-and variable-rate bonds, and $20.5 million will come in the form of low-interest loans made from HDC's corporate reserves.
Auction rate securities are long-term, variable-rate bonds tied to short-term interest rates.
The system's debt is approximately 88% fixed-rate debt and 12% unhedged variable-rate bonds. Debt amortization is rapid as 66.7% of outstanding long-term bonds mature during the next 10-year period.
Interest on Variable-Rate Bonds purchased between 2009 and 2014 will be reset annually every June 21 until maturity.
The debt will comprise minimum JPY70bn of fixed-rate bonds and at least JPY25bn of variable-rate bonds, said the person who refused to be named as the offer had not been made public yet.
The Board approved the sale of up to $794.685 million in one or more series of 30-year tax-exempt fixed-and/or variable-rate bonds to be sold in a negotiated sale.

Full browser ?