# Floating Rate Note

*Markets & Instruments — Finicade finance glossary*

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.

**Also known as:** FRN, floater, floating rate bond

**Related terms:** [Bond](https://finicade.com/glossary/bond), [Interest Rate](https://finicade.com/glossary/interest-rate), [Duration](https://finicade.com/glossary/duration), [SOFR](https://finicade.com/glossary/sofr), [Coupon](https://finicade.com/glossary/coupon)

Source: https://finicade.com/glossary/floating-rate-note