Floating-Rate Debt

A bond or loan with an interest rate that “floats” to reflect changes in borrowing rates. Floating rates are typically priced as a combination of a reference rate, such as the Secured Overnight Financing Rate (SOFR), and an added premium (or spread) that reflects perceived risk. For example, a loan priced at SOFR+150 has an interest rate of SOFR plus 150 basis points (or SOFR plus 1.5%). 

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Floating-Rate Debt