Floating rate note

Floating rate notes (FRNs) are bonds that have a variable coupon, equal to a money market reference rate, like SOFR or federal funds rate, plus a quoted spread (also known as quoted margin). The spread is a rate that remains constant. Almost all FRNs have quarterly coupons, i.e. they pay out interest every three months. At the beginning of each coupon period, the coupon is calculated by taking the fixing of the reference rate for that day and adding the spread.^[1]^[2]^[3] A typical coupon would look like 3 months USD SOFR +0.20%.

^ Jennifer N. Carpenter. "Floating Rate Notes" (PDF). nyu.edu. New York University. Retrieved 21 November 2015.
^ "Floating Rate Note". RiskEncyclopedia.com. Archived from the original on 21 November 2015. Retrieved 21 November 2015.
^ "A Guide to Understanding Floating-Rate Securities". RaymondJames.com. Raymond James Financial. Retrieved 21 November 2015.

[1] Jennifer N. Carpenter. "Floating Rate Notes" (PDF). nyu.edu. New York University. Retrieved 21 November 2015.

[risken-2] "Floating Rate Note". RiskEncyclopedia.com. Archived from the original on 21 November 2015. Retrieved 21 November 2015.

[ray-3] "A Guide to Understanding Floating-Rate Securities". RaymondJames.com. Raymond James Financial. Retrieved 21 November 2015.

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