Search Results for: interest-rate swap

plain vanilla swap

glossary /

A typical interest-rate swap that involves one counterparty’s paying a fixed interest rate while the other assumes a floating interest rate based on the amount of the principal of the underlying debt. • The underlying debt, called the “notional” amount of the swap, does not change hands — only the interest payments are exchanged. — […]

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interest rate swap

glossary /

An agreement to exchange interest receipts or interest-payment obligations, usu. to adjust one’s risk exposure, to speculate on interest-rate changes, or to convert an instrument or obligation from a fixed to a floating rate — or from a floating to a fixed rate. • The parties to such an agreement are termed “counterparties.”

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