A security whose current interest rate is variable. After each interest period, for example after 3, 6 or 12 months, the issuer pays the interest; at the same time, it announces the interest rate for the coming period. – In Europe, this interest rate is usually based on certain rates, in the past mainly on LIBOR (London Interbank Offered Rate) or FIBOR (Frankfurt Interbank Offered Rate), in Asia often on HIBOR (Hong Kong Dollar Interbank Offered Rate). Since the start of the European Monetary Union on January 1, 1999, EURIBOR (European Interbank Offered Rate) has been the most important reference interest rate, which has generally replaced FIBOR even in cases where reference is still made to it. – See bond, floating rate, bond, rising rate, euro bonds, floor, reverse floater, stepdown bond.
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