A floating rate bond is a bond with a variable interest rate, as opposed to a fixed rate bond whose interest rate does not fluctuate.
The interest rate is pegged to a short-term benchmark rate such as LIBOR or the federal funds rate plus a quoted spread or a rate that remains stable.
Many floating rate bonds have quarterly coupons, which means they pay interest four times a year, but some pay monthly, semiannually, or annually.
FRNs are attractive to investors because they can benefit from higher interest rates as the floating rate is periodically adjusted to reflect current market rates.