floating rate note definition

floating rate note

Note (bond) with a periodically reset (usually every three or six months) interest rate tied to six-month London Interbank Offered Rate (LIBOR). Used mainly in euromarket lending as a medium-term debt instrument, these notes have a maturity of five years, come in a wide variety and are classified generally as (1) Perpetual: note without a maturity date. (2) Capped floating rate: note with a ceiling on the interest rate. (3) Mini-Max: note whose interest rate fluctuates within a specified range.

floating rate note is in the Accounting & Auditing, Banking, Commerce & Finance and Investing subjects.

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