A bond that pays a coupon below market floating rate but allows the issuer, thanks to an embedded Bermudan swaption, to flip the floating rate, after a period of time, to a fixed rate on part of all of future coupon payment dates. The embedded Bermudan swaption is exercisable at the floating rate’s reset dates. For example, a 5-year flipper may be constructed so that it pays 5% in year one, and thereafter 5% or 3-month LIBOR (or any alternative benchmark rate) minus 30 basis points, at the issuer’s option.

The flipper is also known as a flip bond.