floating-rate note

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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 ?
Class C mortgage-backed floating-rate notes: 'A+(EXP)sf'; Outlook Stable
In exchange for the 2017 notes, the bank will issue just over EUR136.8m of floating-rate notes due 2011, and slightly over EUR2.646m in cash.
This week, Brixmor Property Group (BBB-/Stable) priced $250 million of floating-rate notes due in 2022 with an interest rate equal to three-month LIBOR plus 1.05% per annum.
The move comes after Industrial & Commercial Bank of China Limited (ICBC) (HKG: 1398) (601398.SS) (OTC: IDCBY) (OTC: IDCBY) priced AUD400m of three-year floating-rate notes at 105 basis points over the relevant swap rate.
Changes to Greece's sovereign rating could affect the rating of Aeolos's floating-rate notes.
Securities and Exchange Commission, assigned United Overseas Bank Limited's (UOB, AA-/Stable) AUD600 million senior unsecured floating-rate notes due 24 January 2022 a rating of 'AA-'.
Singapore: Fitch Ratings has assigned United Overseas Bank Limited's (UOB, AA-/Stable) AUD600 million senior unsecured floating-rate notes due 24 January 2022 a rating of 'AA-'.
Securities and Exchange Commission, upgraded Faxtor ABS 2005-1's class A-4 notes and affirmed class B notes as follows: Class A-4 floating-rate notes (XS0235146569): upgraded to 'BBBsf' from 'CCCsf'; Outlook Stable and Class B floating-rate notes (XS0235147617): affirmed at 'CCsf'.
Class F mortgage-backed floating-rate notes: 'A-sf'; Outlook Stable
The mismatch between the fixed-rate loans (99.8%) and the floating-rate notes is hedged through a swap agreement.
The new debt will be offered in exchange for BBK's USD275m subordinated step-up floating-rate notes due 2017, of which USD152.43m is currently outstanding, the rater added.
The bank sold the bonds in five-year fixed-rate notes, three-year floating-rate notes and five-year floating-rate notes.