Fixed Income
Floating-Rate Note
Definition
What is Floating-Rate Note?
A debt securityA financial instrument representing money borrowed by an issuer and owed to investors. whose coupon resets periodically using a reference rate plus or minus a spread.
Example in practice
How This Looks in Practice
A note pays the policy rateThe benchmark interest rate set or targeted by a central bank to influence financial conditions. plus 2% and resets every quarter.
Keep learning
Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.