Floating Rate Notes
Fixed-income guide to FRNs, VRNs, floating-rate notes, variable-rate bonds, demand notes, and capped floating-rate notes.
Floating-rate, variable-rate, and inflation-linked bond structures that adjust coupons, principal, or redemption values using rates or price indexes.
Floating-rate and inflation-linked bonds adjust coupons, principal, or redemption values using market rates, short-term funding benchmarks, inflation indexes, or contract formulas. These structures can reduce some fixed-rate exposure, but they add reset mechanics, benchmark risk, spread risk, caps, floors, liquidity features, and index-basis risk.
Use this section when rate protection or inflation protection is central to fixed-income analysis. For floating-rate notes, the key questions are what benchmark resets the coupon, how often it resets, what spread applies, and what happens if the reference rate changes or becomes unavailable.
For ordinary coupon mechanics, use Coupon and Interest Payment Structures. For fixed-coupon rate exposure, use Fixed-Rate Bond.
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Fixed-income guide to FRNs, VRNs, floating-rate notes, variable-rate bonds, demand notes, and capped floating-rate notes.
Inflation-linked and index-linked fixed-income securities that adjust principal, coupons, or redemption values using price indexes or other reference measures.