perpetual floating-rate note


A note whose interest rate is variable in nature, usually changing every 6 months, according to a fixed reference rate such as the London Inter-Bank Offered Rate (LIBOR). Such notes are usually represented in terms of:

[Maturity] [Currency] [Reference rate + spread value]

For example, a floater represented as "6 months EUR LIBOR + 0.5%", would yield an interest rate of LIBOR rate at the current time plus 0.5% as the spread in 6 months. Also called floaters, variable-rate notes.

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
perpetual perpetual inventory