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Fixed-Rate Payer
(redirected from Floating Rate Receiver)

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

Fixed-Rate Payer
In a plain vanilla swap, the investor who pays the fixed interest rate and receives the floating 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 fixed rate payer gives 3.5% of the notional value to the floating rate payer and, in return, receives LIBOR + 0.5% of the same notional value. Each party pays the other at set intervals over the life of the swap.


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Forward swaps are used to take a view on forward interest rates, amortizing swaps are used to match the underlying principal to an amortizing loan, while zero-coupon swaps are useful if the floating rate receiver has a short-term cash flow deficit.
Forward swaps are used to take a view on forward interest rates, amortizing swaps are used to match the underlying principal to an amortizing loan, while zero-coupon swaps are useful if the floating rate receiver has a short-term cash flow deficit.
 
 
 
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