Floating Rate Note (FRN)
A floating-rate note (FRN) is a debt security whose periodic coupon payments adjust based on a published reference rate plus a fixed spread. The coupon resets at predetermined intervals and the principal is typically repaid at maturity.
Example: An FRN issued by a bank with a five-year maturity and a coupon equal to SOFR plus a 0.50% spread, resetting every three months.
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