FRN
Business & Finance abbreviation · Bond & Fixed-Income
| Stands for | Floating-rate note |
|---|---|
| Categories | Business & Finance |
FRN stands for Floating-rate note, a bond & Fixed-Income abbreviation.
Bond whose coupon resets periodically, typically every one to three months, based on a reference rate such as SOFR or EURIBOR plus a fixed spread. Because the coupon moves with interest rates, its price stays relatively stable.
Example: The bank issued a three-year FRN paying SOFR plus 85 basis points.
Usage notes
Banks, governments and companies issue FRNs, and the US Treasury has offered two-year floating rate notes since 2014. Floaters appeal to investors who expect rates to rise. Their main risk is credit risk rather than interest-rate risk.
Related abbreviations
More bond & Fixed-Income abbreviations
- CoCo – Contingent convertible bond
- CP – Commercial paper
- DV01 – Dollar value of a basis point
- ESTR – Euro short-term rate (€STR)
- EURIBOR – Euro Interbank Offered Rate
- FRA – Forward rate agreement
- GO – General obligation bond
- HY – High yield
- IG – Investment grade
- IRS – Interest rate swap
- JGB – Japanese government bond
- LIBOR – London Interbank Offered Rate