A debt security that is issued by a financial institution on an underlying such as a single equity, equity indexes, a basket of stocks/ equities, commodities, interest rates, or currencies. Examples include inverse floaters, range notes, credit-linked notes, leveraged floaters, etc. A credit-linked note, for instance, has its payoff  determined on the basis of credit payoff. It combines both a debt instrument and a credit derivative.

A structured note has its performance linked to the return or rate attained by its underlying over the course of its term. A structured note is an over the counter (OTC) derivative with hybrid security features, where the payoffs from a number of assets (stocks, bonds, hybrids, etc.) are combined. Specifically, a hybrid security consists of a derivative and a bond component.

A plain-vanilla structured note is one in which the interest payment component is linked to a single benchmark such as a floating rate note (floater).