Last modified on 29 May 2014, at 19:42

floorlet

EnglishEdit

EtymologyEdit

floor +‎ -let

NounEdit

floorlet (plural floorlets)

  1. (finance) A component of an interest rate floor, a derivative instrument that effectively prevents the interest payments on an otherwise variable-rate loan from falling below an agreed level (the "floor"). Each "floorlet", analysable as a put option, covers one interest accrual period (such as three months); the whole interest rate floor is made up of a series of consecutive floorlets.