It stands for floating-rate note; a medium to long-term debt obligation (note) that has its coupon rate linked to some reference interest rate (specifically a money market index such as Treasury bill rates). Interest is adjusted periodically, often every three or six months. The interest rate is usually fixed at a preset spread over the reference rate which may also be one of many deposit rates (LIBOR, LIBID, or LIMEAN).

Most FRNs have a maturity of five years. They provide holders with protection increases in interest rates but pay lower yields than fixed rate notes of the same maturity. FRNs are negotiable and transferable, and issued in predetermined and uniform proportions. Variants of FRN include: drop-lock bond, min-max note, capped FRN, convertible FRN, mismatch FRN, etc.

This note is also known as a floater.