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Floating Rate Note FRN

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Definition of 'Floating Rate Note FRN'

A Floating Rate Notes is also known as an FRN or a floater. It is a debt instrument with a variable interest rate. The interest rate is tied to a benchmark such as the United States Treasury bill rate, LIBOR, the fed funds or the prime rate. FRNs are mostly issued by financial institutions and governments. They typically have a two to five-year term to maturity.

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