Floating-rate payer

(redirected from Fixed-Rate Receiver)

Floating-rate payer

In an interest rate swap, the counterparty who pays a rate based on a reference rate, usually in exchange for a fixed-rate payment.

Floating-Rate Payer

In a plain vanilla swap, the investor who pays the floating interest rate and receives the fixed interest rate. The two legs of a plain vanilla swap are a fixed interest rate, say 3.5%, and a floating interest rate, say LIBOR + 0.5%. In such a swap, the only things traded are the two interest rates, which are calculated over a notional value. The floating rate payer gives LIBOR + 0.5% of the notional value to the fixed rate payer and, in return, receives 3.5% of the same notional value. Each party pays the other at set intervals over the life of the swap.
References in periodicals archive ?
Similarly, as the fixed-rate receiver, Firm B's risk exposure at date 0 is:
Similarly, the fixed-rate receiver is assured of the receipt of the same amount, barring default by the counterparty.
Depending on your firm's hedge objective, you can agree to be either a fixed-rate payor that receives the floating rate or a fixed-rate receiver that pays the floating rate.