Floating rate

From ACT Wiki
Revision as of 12:22, 31 March 2021 by Doug Williamson (Talk | contribs) (Add link.)

(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search

Interest rates - market rates - wholesale.

Any method of paying interest that is periodically refixed in line with the current market rate.

Floating rate interest is not fixed for the life of the issue, but is periodically reset according to a predetermined formula.

Floating rate debt, for example, carries an interest rate which will vary as market interest rates vary.

There is a time lag between the setting of the rate for each tranche of interest at the start of the interest calculation period, and its payment at the end of the interest period.

See also