Join Mailing List

For latest news and information about Treasury and Financial Markets, enter your details below:

Floating rate notes

Print Preview Send to a Friend Share

Published: 4th March 2010 by William Webster

Introduction

A bond is a long term debt obligation. It is sold by the borrower who is called the "issuer" in order to borrow money for the medium and long term. Typically a bond will have a maturity of between 2 and 20 years. The issuer can be a bank, company or government institution. A bond normally has a known maturity or redemption date and during its life pays the investor interest. The interest payments are called "coupons". Bond investors rank prior to equity holders in liquidation but are subordinate to secured lenders. From an issuer's perspective the coupons are usually tax deductible (unlike dividend payments on equity). Bond markets provide investors with variety. One of the most frequently issued bonds is called a floating rate note.

Register for free or login to view the full publication

Related Documents

Registration Requiredelearning > Floating rate notes 100% relevant

Learn about the following: How floating rate notes work. Why they are bought and sold. Simple methods of evaluation. The risks FRNs present to investors.


Registration RequiredMarket Guides > The all in cost of floating rate issuance 74% relevant

20th September 2009

Floating rate notes (FRNs) are bonds that pay investors a regular coupon linked to short term interest rates like three or six month Libor. This can suit the investor and issuer alike. The cost of issuance is key to the borrower. Discounts to par value and margins must be taken into account. Find out more about the all in cost.


Registration Requiredelearning > Credit linked notes 25% relevant

Learn about the following: How credit linked notes work. Why issuers and investors use credit linked notes. The main risks related to credit linked notes


Registration RequiredQuick Guides > Credit Linked Notes 25% relevant


Free to ViewShort courses>Interest rate swaps 15% relevant


Registration RequiredCredit spreads 15% relevant

25th March 2017

The following explains what credit spreads are and why they are important. How credit risk occurs in Treasury and what we need to do to manage this risk. The links between credit spreads, bond prices, default probabilities and recovery rates.