FRN

floating-rate note (FRN)

A medium-term instrument with a coupon rate that floats up or down based upon changes to an index or reference rate. Often, FRNs are tied to LIBOR. American Banker Glossary

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( floating-rate note)

note whose interest payment ( interest payments) varies with short-term interest rates. Bloomberg Financial Dictionary

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See floating rate note. Dresdner Kleinwort Wasserstein financial glossary

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FRN FRN FINANCE

abbreviation for floating rate note ➔ note¹

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   A floating rate note is a medium-term debt instrument that pays a variable rate of interest. The coupon is usually a premium to Libor (the London Interbank Offered Rate), the 'riskless' rate at which banks lend to each other, or its local equivalent such as Euribor. For example, the investor is promised a quarterly coupon of 125 basis points over three-month Libor.

   ► See also Coupon, LIBOR, Euribor.

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FRN UK US noun [C] FINANCE

► ABBREVIATION for FLOATING RATE NOTE(Cf. ↑floating rate note): »

An instrument which mitigates this problem of interest rate risk is the FRN.