structured note
Definition
Is a debt security with one or more special features, such as making payments based on an underlying index. For instance, a structured note is a bond which, instead of paying the typical interest payments, will use an index, such as the S&P 500, to determine the amount of the interest payment. This type of debt security is complex and is used primarily by sophisticated ivnestors. By hedging the security on an underlying asset, the investor is sometimes able to receive larger returns on the investment.
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