Term:
Floating-rate notes (FRNs)
Definition:
FRNs are medium- to long-term debt obligations with variable interest rates that are adjusted periodically (typically every one, three, or six months). The interest rate is usually fixed at a specified spread over one of the following specified deposit rates:
- London interbank offered rate (LIBOR),
- London interbank bid rate (LIBID), or
- London interbank mean rate (LIMEAN) (average of LIBOR and LIBID)
Domain:
Finance
Source:
Coordinated Portfolio Investment Survey Guide, Second Edition, International Monetary Fund, 2002, Washington DC. Appendix VI: Definition and Description of Instruments
