Interest Rate Securities come in four primary flavours:

• Corporate Bonds. An unsecured loan to a company for a fixed period of time at a fixed rate of interest.
• Floating rate notes. An interest rate security that pays interest at a variable rate that is set periodically in relation to an underlying reference rate.
• Convertible Notes. A loan made to a company at a fixed rate of interest with the right to be either redeemed (i.e. repaid by the company) for cash or converted into ordinary shares at a predetermined date or within a certain period.
• Hybrid Securities. Hybrid Securities are products that may have both equity and debt characteristics during their life, although typically they begin their life with predominantly fixed interest characteristics. They generally pay a fixed dividend for a set period of time and then convert into the ordinary shares at a date or dates in the future.

Details of current interest rate securities available in Australia can be obtained at the ASX website.

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