Floating-Rate Bond

A floating-rate bond pays interest at a rate that resets periodically, usually by reference to a benchmark plus a stated spread.

A simple example

A note may pay a short-term benchmark rate plus 2 percentage points and reset every three months.

Why this matters to income investors

Resetting coupons can reduce some fixed-rate sensitivity, but they do not remove credit, liquidity, call, or benchmark risk.

How to use floating-rate bond in your research

Check the benchmark, spread, reset frequency, caps, floors, maturity, seniority, and issuer credit quality.

This material is general education and information, not individualized investment, tax, or legal advice.