Finance

Minimum Payoff Range Note

January 17, 2022
Islamic Finance

Khiyar al-Ruyat

January 17, 2022

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A floating-rate note (FRN) which has a minimum and a maximum interest rate, i.e., an embedded collar. This collar has the effect of limiting the reference rate to minimum and maximum values so that the holder can confine fluctuations in the reference rate to a specific range (a lower and an upper boundary).

A mini-max floating-rate note is also known as a mini-max floater or a collared floating-rate note.

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