Floating-Rate Note - FRN


Floating-Rate Note - FRN
A note with a variable interest rate. The adjustments to the interest rate are usually made every six months and are tied to a certain money-market index.

Also known as a "floater".

These protect investors against a rise in interest rates (which have an inverse relationship with bond prices), but also carry lower yields than fixed notes of the same maturity. It's essentially the same concept as an adjustable-rate mortgage, except FRNs are investments (not debt).


Investment dictionary. . 2012.

Look at other dictionaries:

  • floating rate note — see note Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. floating rate note …   Law dictionary

  • Floating Rate Note — Anleihe mit variabler Verzinsung; Floater (fachsprachlich) …   Universal-Lexikon

  • Inverse floating rate note — An inverse floating rate note, or simply an inverse floater, is a type of bond or other type of debt instrument used in finance whose coupon rate has an inverse relationship to short term interest rates (or its reference rate). With an inverse… …   Wikipedia

  • capped floating rate note — /ˌkæpt fləυtɪŋ reɪt ˌnəυt/ noun a floating rate note which has an agreed maximum rate …   Dictionary of banking and finance

  • inverse floating rate note — Fin a note whose interest rate varies inversely with a benchmark interest rate …   The ultimate business dictionary

  • Inverse floating rate note — A variable rate security whose coupon rate increases as a benchmark interest rate declines. The New York Times Financial Glossary …   Financial and business terms

  • inverse floating-rate note — A variable rate security whose coupon rate increases as a benchmark interest rate declines. Bloomberg Financial Dictionary …   Financial and business terms

  • variable-rate note — VRN A bond, usually with a fixed maturity, in which the interest coupon is adjusted at regular intervals to reflect the prevailing market rate (usually a margin over the London Inter Bank Offered Rate). A VRN differs from a floating rate note in… …   Accounting dictionary

  • variable-rate note — VRN A bond, usually with a fixed maturity, in which the interest coupon is adjusted at regular intervals to reflect the prevailing market rate (usually a margin over the London Inter Bank Offered Rate). A VRN differs from a floating rate note in… …   Big dictionary of business and management

  • note — 1 n 1 a: a written promise to pay a debt; specif: promissory note in this entry bank note: a promissory note issued by a bank payable to bearer on demand but without interest and circulating as money cog·no·vit note /käg nō vit , kōg /: a note in …   Law dictionary

  • Note — Debt instruments with initial maturities greater than one year and less than 10 years. The New York Times Financial Glossary * * * ▪ I. note note 1 [nəʊt ǁ noʊt] noun 1. [countable] BANKING a piece of printed paper that is used as money; …   Financial and business terms


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