Structured Note

A debt obligation, usually in the form of a medium term note or a bank certificate of deposit, with one or more embedded risk/return modification components (swaps, forwards, options, caps, floors, etc.) which change its return pattern. A corporation or government agency which issues a structured note usually buys the risk/return modification components from a financial intermediary, but the issuer remains ultimately responsible for all payments to the holder of the note. Also called Hybrid Debt. For examples, see Convertible Money Market Units (CMMUs) (diagram), Equity-Linked Note (ELN) (diagrams), Reverse Floating Rate Note (diagram).