A floating rate note (FRN) or bond is a security that pays a coupon linked to a variable benchmark. In Australia FRNs generally pay a coupon set as a margin above the bank bill swap rate (BBSW) which is the market benchmark three month interbank rate (sometimes the 1 month BBSW). The actual coupon for an interest period will be determined at the start of that period by applying the margin to the three-month BBSW rate on the first day of the coupon period. The three-month BBSW rate will rise and fall over time based on prevailing interest rates. The margin is fixed and will be set at the time of issue

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