Floating rate and Floating rate note: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Expand for fixed debt and floating debt.)
 
imported>Doug Williamson
(Add alternative name.)
 
Line 1: Line 1:
Any method of paying interest that is periodically refixed in line with the current market rate.
(FRN).  


Floating rate interest is not fixed for the life of the issue, but is periodically reset according to a predetermined formula.
A bond, normally with a fixed maturity, where the interest coupon is adjusted at regular intervals reflecting the prevailing market rate (usually at a margin over LIBOR).


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


Sometimes known as a floating rate ''bond'', or a 'floater'.


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 ==
* [[Bond]]
* [[Capped FRN]]
* [[Convertible FRN]]
* [[LIBOR]]
* [[Nominal bond]]


== See also ==
[[Category:Financial_products_and_markets]]
* [[Basis swap]]
* [[Drop-lock bond]]
* [[Exposure period]]
* [[Fixed debt]]
* [[Fixed rate]]
* [[Floating debt]]
* [[Floating exchange rate system]]
* [[Floating rate payer]]

Revision as of 19:31, 1 December 2018

(FRN).

A bond, normally with a fixed maturity, where the interest coupon is adjusted at regular intervals reflecting the prevailing market rate (usually at a margin over LIBOR).


Sometimes known as a floating rate bond, or a 'floater'.


See also

Retrieved from ‘https://wiki.treasurers.org/w/index.php?title=Floating_rate&oldid=21573’