Floating Rate Note
Also called: FRN, floater, floating rate bond
A floating rate note pays a coupon that resets periodically against a reference rate plus a fixed spread — say SOFR + 90bp, reset quarterly. Because the coupon follows rates, the price barely moves when rates change, giving an FRN almost no interest-rate duration. What remains is credit risk: the spread is fixed, so if the issuer deteriorates the price falls. Floaters are the standard defensive holding when rates are expected to rise.