A type of capped floored floater in which the capped coupon varies over the life of the note/ bond. An example is a bond that pays a floating coupon that is subject to a cap rate (say 6%) whose level is stepped (up) from time to time: it adjusts by steps of 0.3% upward. This floater helps an investor adjust a previously set cap even higher depending on prevailing market rates at the time.
August 20, 2024
