Floating-rate bonds are bonds that can be redeemed at par at the option of their holder either at specific date after the date of issue and every 1 to 5 years thereafter or when and if the firm takes specified actions such as being acquired, acquiring another company, or issuing a large amount of additional debt.

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Floating-rate bonds have interest rates that reset periodically, typically based on a reference rate plus a spread, rather than offering options for redemption at par based on specific actions or timeframes.

Floating-Rate Bonds Are Bonds That Can Be Redeemed at Par