Floating rate bonds tend to be medium to long term bonds, what are the characteristics of floating rate?

Interest rate bonds are mainly treasury bonds, local government bonds, policy financial bonds and central bank bills. Interest rate bonds can be categorized into fixed rate bonds and floating rate bonds. Fixed-rate bonds are bonds that are issued with the stipulation that the interest rate remains constant throughout the repayment period. Fixed interest rate bonds are bonds that remain unchanged during the period without regard to market changes. Fixed rate bonds do not take into account market changes, so their financing costs and investment returns can be predicted in advance with less uncertainty. However, bond issuers and investors must still bear the risk of market interest rate fluctuations. Fixed rate bonds are the traditional type of international bonds and the most commonly used typical form of international bond financing. Floating-rate bonds are bonds whose issuance stipulates that the bond interest rate fluctuates regularly with the market interest rate, i.e. the bond interest rate can be changed and adjusted during the repayment period. Floating rate bonds are usually medium to long term bonds. The interest rate of floating rate bonds is usually determined according to the market benchmark interest rate plus a certain spread. The interest rate of U.S. floating rate bonds mainly refers to the interest rate of the 3-month period, that is, the bond interest rate can be issued during the repayment period.

The floating rate bond arose in 1970. The bond combines the advantages of medium-term syndicated loans and long-term Eurobonds. On the one hand, it can provide borrowers with medium- and long-term loan funds for longer periods than syndicated loans, and on the other hand, it reduces the risk of capital depreciation caused by rising interest rates. Participants in the securities market usually believe that floating rate bonds have the effect of distributing risks equally to borrowers and lenders, providing both parties with conditions to equitably avoid the risk of interest rate changes; from the point of view of market performance, the market price of floating rate bonds is relatively stable, with small differences in trading, little difference between the interest rate borne by the bond issuer and LIBOR, and high liquidity of the coupon type, which fully reflects the innovative financial instrument's The role of this innovative financial instrument is fully realized. Since the 1980s, floating rate bonds have developed rapidly and become an important financial innovation in the international capital market. Their varieties and terms of issue have become increasingly diversified and complex. The issuers of these bonds are mostly financial institutions engaged in the loan business.

Since bond interest rates fluctuate with market rates, the form of floating-rate bonds avoids any significant discrepancy between actual bond yields and market yields, aligning the issuer's costs and the investor's income with market trends. However, the floating of bond interest rates also leads to a higher degree of risk by introducing a high degree of uncertainty in advance of the issuer's actual costs and the investor's actual income. Depending on the changes in short-term deposit rates, the bond interest license is adjusted every 6 or 3 months (depending on the conditions of bond issuance); its interest rate is usually at the London Interbank Offered Rate (LIBOR) interest rate fluctuations are usually subject to a minimum fluctuation limit, and the upper limit of interest rate fluctuations can be attached;

Floating-rate bonds can be accompanied by different interest coupons depending on the conditions of the body of the issue, which are usually paid every 6 or 3 Payments are made every 6 months or 3 months; floating rate bonds are usually medium to long term bonds with a maturity of 5 to 15 years; floating rate bonds are mostly transferable bearer bonds. What are the characteristics of floating rate bonds? What are the characteristics of floating rate bonds? Its bond interest license is adjusted every 6 months or 3 months (depending on the bond issuance conditions). Floating rate bonds are usually medium to long term bonds. The interest rate of a floating rate bond is usually determined based on the market benchmark interest rate and a certain spread. The interest rate level of floating rate bonds in the United States mainly refers to the Treasury rate for a three-month period, while in Europe it is mainly the London Interbank Borrowing Rate (LIBOR), and China's current benchmark interest rate for floating rate bonds refers to the one-year bank deposit rate. developed countries floating rate bonds of a wide variety, such as the provisions of the upper and lower floating interest rate bonds, the provisions of the interest rate to reach the prescribed level can be automatically converted to a fixed interest rate bonds floating rate bonds, floating interest rate bonds with an option, repayment of the period of the fixed rate of interest of the hybrid interest rate bonds, and so on.