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Meaning & use

FRN

abbreviation·Advancedfinancetechnical

Last updated

UK/ˌef ɑːr ˈen/
US/ˌef ɑːr ˈen/

Meaning

  1. abbreviationcountablefinance

    Short for floating rate note, a bond whose interest payments rise and fall with a benchmark interest rate.

    Grammar: Takes a: an FRN, two FRNs.

    Patterns

    • buy an FRN
    • an FRN linked to something

    The bank issued an FRN that follows the central bank rate.

    Investors like an FRN when rates are rising.

    The fund holds several FRNs with short maturities.

Word forms

pluralFRNs

Common combinations

issue an FRN
The company issued an FRN to raise funds.
hold an FRN
The pension fund holds an FRN.
FRN coupon
The FRN coupon resets every quarter.
FRN market
The FRN market grew last year.

Synonyms and how they differ

floater
Floater is an informal market nickname for the same type of bond.
variable-rate bond
Variable-rate bond is a general description, while FRN is the standard market term.

Opposites

fixed-rate bond

Word family

floating adjective
changing with the market
rate noun
price of borrowing money
note noun
a written promise to pay
bond noun
a loan sold to investors

Commonly confused: FRN or FRN?

FRN vs FRN

In some countries FRN also means other things, so it should be spelled out if the context is not financial.

Practice

Interest on an FRN is best described as

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