Floating rate debt is advantageous to investors because the interest rate moves up if market rates rise. Floating rate debt shifts interest rate risk to companies and thus has no advantages for issuers.

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Floating rate debt is advantageous to both investors and issuers. For investors, the interest rate on floating rate debt moves up if market rates rise, which can protect them against inflation. For issuers, floating rate debt provides flexibility and reduces interest rate risk as the interest rate adjusts to market changes.

Floating Rate Debt Is Advantageous to Investors Because the Interest