A structured instrument that constitutes a call option on a capped floating rate note (capped FRN). The coupon is a floating rate with a specified spread. In other words, the coupon is the lower of two variables: 1) the rate to which the instrument is linked (a floating rate such as LIBOR, CMS rate, or some fixed rate) at a given point in time, plus a spread and 2) the cap.

Callable capped FRNs are callable LIBOR exotic products.