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Equity Swap
(redirected from Equity swaps)

   Also found in: Wikipedia 0.03 sec.
Equity swap
A swap in which the cash flows exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or floating rate). Related: Interest rate swap.

Equity Swap
A swap in which the at least one of the two legs is the cash flow from some equity instrument like a stock. For example, the counterparties to an equity swap may agree to exchange the dividends from two stocks of roughly the same value. Alternatively, they may exchange the capital gains from a stock index for an interest rate calculated over a nominal value. Equity swaps may take a variety of forms, but all exist in order to diversify the cash flows of the parties without requiring them to buy anything new. An equity swap may also help one or both parties legally avoid taxation.

equity swap
An exchange of the potential appreciation of an equity's value and dividends for a guaranteed return plus any decrease in the value of the equity. An equity swap permits an equity holder a guaranteed return but demands the holder give up all rights to appreciation and dividend income.


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CMBOR has no firm figures on debt for equity swaps being carried out, but chief Rod Ball said of the deals being done at the top of the market: "More and more (swaps) seem to be happening - not just in the UK, but on the Continent as well - although they tend to keep quite quiet about it.
In the integration through equity swaps on April 1, Aioi Insurance and Nissay Dowa will become subsidiaries of Mitsui Sumitomo Insurance, which will be renamed MS&AD Insurance Group Holdings Inc.
Debt to equity swaps As noted above, debt for equity swaps are refinancing deals where a company's creditors, such as banks, agree to cancel some/all of their debt in exchange for equity.
 
 
 
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