drop lock

drop lock
The fixing of the interest rate on a floating-rate note or preferred stock if it falls to a specified level. Bloomberg Financial Dictionary

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drop lock UK US noun [C] FINANCE
an arrangement in which a loan with a changing interest rate will be replaced by a bond with an interest rate that does not change, if the interest level goes down to a particular level: »

A drop lock gives some protection to investors by combining a floating- and fixed-rate security.


Financial and business terms. 2012.

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Look at other dictionaries:

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