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Asset Swap

   Also found in: Acronyms 0.04 sec.
Asset Swap
Similar in structure to a plain vanilla swap, the key difference is the underlying of the swap contract. Rather than regular fixed and floating loan interest rates being swapped, fixed and floating investments are being exchanged.

Notes:
In a plain vanilla swap, a fixed libor is swapped for a floating libor. In an asset swap, a fixed investment such as a bond with guaranteed coupon payments is being swapped for a floating investment such as an index.


Asset swap
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.

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The Cofina/Lecta bid also includes an asset swap element that the co-bidders argue will create greater value than M-real's offer since the company would have an emphasis on coated fine paper rather than uncoated.
Petrobras Invests Big (US$) DEAL TERMS AMOUNT YPF-Repsol Asset swap $1 billion Pecom Purchase 59% $1 billion Pecom to invest (five years) $2 billion Petrolera Santa Fe Purchase $88.
Structure it (as a merger, acquisition or asset swap, for example).
 
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