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TeachMeFinance.com - explain inverse floater inverse floater -- an asset, such as a mortgaged backed bond, paying an adjustable interest rate that rises or falls in the opposite direction of the movement of general market interest rates . The floating coupon rate is calculated as the difference between a constant interest rate and a designated index. For example, the floating rate might be 14 percent minus the current rate of LIBOR. As LIBOR increases, the bond's coupon payment rate decreases and vice versa. An inverse floater is a type of structured note. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.