A floating-rate note (floater) that comes with a changing quoted margin. That means the quoted margin changes at certain intervals during the term of the floater. However, the quoted margin could either step to a higher or lower level over the floater’s life. For instance, the coupon formula for a stepped spread floater could be, from issuance until a specific point during its life:

Coupon rate = 3-month LIBOR + 50 basis points

From that point in time until maturity, the quoted margin may be stipulated to step up to 100 basis points (or to step down to 30 basis points).