QUICK DEFINITION
Floating-Rate Note is a bond whose coupon resets periodically according to a reference rate plus or minus a spread.
WHY IT MATTERS
Why Floating-Rate Note matters in bond markets
Floating-rate notes generally have less duration exposure than comparable fixed-rate bonds but remain exposed to credit and spread risk.
MARKET CONTEXT
How to think about it
Bond investors use floating-rate note as part of a wider framework that links prices, yields, cash flows, liquidity and risk. The concept should therefore be read together with its related terms rather than as an isolated definition.
Is Floating-Rate Note important for fixed-income investors?
← Back to the Bond Market Glossary Yes. Floating-rate notes generally have less duration exposure than comparable fixed-rate bonds but remain exposed to credit and spread risk.