CDRAN = Callable Daily Range Accrual Note

A range accrual note is a structured product where the coupon is linked to the performance of a reference index. The return from the note will be higher than that from traditional fixed-rate deposits if the underlying asset moves within a pre-determined range during the life of the note.

Investors can obtain an even higher return by making the note callable after an initial ‘lockout’ period. A callable range accrual note is a range accrual note where the issuer has the option to call the note at specified dates in the future, typically at par. This option is valuable to the issuer and exposes the investor to reinvestment risk.