Index Amortizing Note - IAN

You want to put some money in the bond market. Rates look pretty good now, but you're worried. You're afraid that interest rates are going to change over time and mess with your investment. If rates go up, the return you're getting won't keep up with inflation and you'll feel like a sucker.

An index-amortizing note is here to help. It's a note (a.k.a. a bond) where the repayment schedule resets according to the movement of an interest rate-tracking index (LIBOR is a popular choice, or something tied to mortgage rates).

Basically, if interest rates move enough, the structure of the bond changes so that you get paid back more quickly. You get your money back sooner, so you can invest in a different bond, one more suited to the current interest rate climate.