A floater (floating-rate note) in which the coupon moves inversely to the movement of the reference rate. That is, if the reference rate moves down, the coupon payment of an inverse floater increases, and if the reference rate moves up, the coupon payment decreases. A practical example of an inverse floater is the Lira-denominated one issued by the World Bank in December 1997 with a maturity of 12 years. For the first four years, rates were set on a decreasing scale from 12% down to 7%. For the next sever years the rate was specified by this formula: 15.5% – 2% × LIBOR. This formula implies that when reference rate rises, rates fall and vice versa.

An inverse floater is also known as a reverse floater or a bull floater.