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Fixed-Then-Floating Bond


A bond that pays a fixed amount of interest (coupon) for a specific period of time and then turns into a floating-rate bond (i.e., its coupon is based  on a floating rate). Investors expecting an inverted yield curve in the future would select to hold such a bond.

In this sense, a fixed-then-floating bond is opposite to a flip bond (flipper) which switches from floating to fixed rate mode.



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