Interest rate swap

Interest rate swaps are used for many purposes. If a corporation has borrowed money at a floating rate of interest but would prefer to lock in a fixed rate, it can swap its floating rate payments into fixed rate payments.

Interest rate swaps are another significant financial derivative dependent on LIBOR. In an interest rate swap, two parties exchange sets of interest payments on a given amount of capital.

Interest Rate Swap Points Interest rates may be determined by a simple rule using the bid and offer spread on an FX rate.

Interest Rate Swap An agreement between two parties (known as counterparties) where one stream of future interest payments is exchanged for another based on a specified principal amount.

interest rate swap contract in which two counter-parties agree to exchange interest payments of differing character based on an underlying notional principal amount that is never exchanged.

Interest rate swap A binding agreement between to exchange periodic payments on some predetermined dollar principal, which is called the .

Interest Rate Swap - Is the contract whereby one party typically agrees to exchange a floating rate for a fixed coupon rate. There are many variations to this theme.

interest rate swap A financial instrument representing a transaction in which two parties agree to swap or exchange net cash flows, on agreed-upon dates, for an agreed-upon period of time, for interest on an agreed-upon principal amount.

Interest Rate Swaps An arrangement that requires both sides of the transaction to make payments to each other based on two different interest rates. The most commonly traded requires one side to pay a fixed rate and the other to pay a floating rate.

Interest Rate Swap See Swap. Internal Audit An in-houseaudit of an organisation's records, procedures or systems.

Interest rate swaps involve agreements on the means for exchanging future cash flows.

Interest rate swap An interest rate swap is an agreement between two borrowers to pay each other’s interest costs.

Interest Rate Swap: An agreement to exchange interest payments for a specific period of time on a given principal amount. The most common interest rate swap is a fixed-for-floating coupon swap, with the floating rate coupon indexed to LIBOR.

Interest rate swap An agreement to exchange a floating rate of interest for a fixed rate or vice versa.

Interest rate swap A binding agreement between counterparties to exchange periodic interest payments on some predetermined dollar principal, which is called the notional principal amount. For example, one party will pay fixed and receive variable.

Interest Rate Swap A swap where (typically) one counterparty is the payer of fixed rate interest and the other is the payer of floating rate interest, with both payments being in the same currency.

interest rate swap: An arrangement to swap a fixed loan rate for a floating loan rate, or vice versa. interest-sensitive stock: A stock whose operations and earnings are impacted by changes in interest rates.

An interest rate swap designed to end a counterparty's role in another interest rate swap, accomplished by counterbalancing the original swap in maturity, reference rate, and notional amount. Popular terms ...

An interest rate swap whose notional value adjusts according to rising interest rates by indexing the floating portion to a CMS.

An interest rate swap from one floating instrument into a non floating instrument in the same currency, undertaken to eliminate or minimize interest-rate risk. Français: Swap de base Español: Swap de índices, intercambio de índices Bear: ...

An interest rate swap in which the fixed rate payments are traded for a floating rate. Fixed Income Securities Securities that obligate the issuer to pay the owner interest during their term and to return the principal or face value at maturity.

An interest rate swap used to alter the cash flow characteristics of an institution's assets in order to provide a better match with its liabilities. Asset turnover The ratio of net sales to total assets.

In an interest rate swap, the date that the counterparties commit to the swap. Also, the date on which a trade occurs. Trades generally settle (are paid for) 1-5 business days after a trade date.

In an interest rate swap, the predetermined dollar principal on which the exchanged interest payments are based.

In an interest rate swap, the date the swap begins accruing interest. [ Previous Page ] Personal Finance Glossary ...

Amortizing interest rate swap Swap in which the principal or notional amount rises (falls) as interest rates rise (decline).

Step-up swap An interest rate swap on which the notional principal increases according to a predetermined schedule.

In the case of an interest rate swap, the market interest rate paid by the party responsible for the fixed payments.

Liability swap An interest rate swap used to alter the cash flow characteristics of an institution's liabilities so as to provide a better match with its assets.

Receive floating counterparty The transaction in an interest rate swap who receives payments based on the floating rate and makes payments based on the fixed rate.

Effective date In an interest rate swap, the date the swap begins accruing interest. Effective debt The total debt owed by a firm to its creditors.

Swap buy-back The sale of an interest rate swap by one counterparty to the other, effectively ending the swap. Swap fund See: Exchange fund. Swap option See: Swaption. Related: Quality option.

Fixed for floating swap An interest rate swap in which the fixed rate payments are tradeed for a floating rate. Fixed income equivalent Also called a busted convertible.

Fixed-rate payer In an interest rate swap the counterparty who pays a fixed rate, usually in exchange for a floating-rate payment.

liability swap An interest rate swap designed to alter the cash flow characteristics of an...

Interest Rate Swap An arrangement in which two parties agree to exchange interest rate flows (periodic interest payments), at agreed intervals, over an agreed ...(Read more) Interest Receivable ...

Basis Swap A floating-for-floating interest rate swap that pairs two floating rate instruments at different maturities (such as 6-month LIBOR versus 30-day U.S. T-bills). Bearer Bonds Bonds that can be redeemed by the holder.

Synthetic Loan: Typically, a floating rate instrument created by combining an interest rate swap with a bond.

The spreadlock allows a future user of an interest rate swap to take advantage of the current spread between the swap rate and the bond rate.

Among these are commodity futures, interest rate swap agreements, options related agreements, and so on. These investments are generally referred to as derivatives, because their value is based upon or derived from something else (e.g.

QSD - Quality Spread Differential - In an interest rate swap, the difference between the interest rates of debt obligations offered by two parties of different creditworthiness that engage in the swap.

For example, interest rate swaps, where floating rate interest is exchanged for fixed rate interest, protects a corporation against rises in rates or allows it to take advantage of a better rate.

More complex swaps, including interest rate swaps and currency swaps, are used by corporations doing business in more than one country to protect themselves against sudden, dramatic shifts in currency exchange rates or interest rates. Sweep account ...

In an interest rate swap, the cash flows are denominated in the same currency. In a currency swap, the cash flows are in different currencies. Both types of swaps are used by the Government of Canada.

(1) General exchange of assets or payment obligations. (2) Also: asset-based swap. Interest rate swap in which the fixed rate payer holds a bond whose cash flow (interest rate, interest payment dates, denomination) is reflected in the swap terms.

An interest rate swap is an agreement to exchange a series of fixed interest rate cash flows for a series of floating interest rate cash flows (which can be tied to a specific index rate).

A swap is a contract whereby two counterparties agree to a periodic exchange of cash flows for a given period of time based of a specified notional amount of principal. In an interest rate swap, the cash flows are denominated in the same currency.

An agreement between two parties that wish to switch floating-rate loan payments for fixed-rate loan payments in the same or different currencies. The rationale behind interest rate swaps is that one party may have access to better fixed-rates and ...

into at-the-money (i.e. with minimal initial cash payments because fair value is zero), through brokers or dealers who take an up-front cash payment or who ad just the rate to bear default risk. The two most prevalent swaps are interest rate swaps ...

In the classic interest rate swap agreement two parties contract to exchange interest payments based on the same amount of indebtedness of the same maturity and with the same payment dates; ...

See also: Interest, Interest Rate, Market, Exchange, Money