Forward interest rate

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Forward interest rate

Interest rate fixed today on a loan to be made at some future date.

Forward Interest Rate

An interest rate to which a borrower and lender agree for a loan to be made in the future. According to the unbiased expectations hypothesis, forward interest rates predict spot interest rates at the time the loan is actually made, but many analysts dispute whether this is true.
References in periodicals archive ?
Common rights included are the rights to collect mortgage payments monthly, to set aside taxes and insurance premiums in escrow, and to forward interest and principle to the mortgage lender.
As a gage of future borrowing and lending needs they can imply when an economic recovery is expected by the implied activity of forward interest rate movements.
Reporting from the floor of the CME/CBOT with the most liquid futures contract in the world behind them, Cook and Simons dissected the forward interest rate curve that these 40 contracts for 3-month LIBOR deposits represent.
Separately, the company has entered into a forward interest rate swap agreement to reduce its exposure to interest rate fluctuations.
The 2007 bonds' variable interest rate exposure will be swapped to a fixed rate via a forward interest rate swap agreement entered into with Citibank, NA as counterparty, back in April 2006.
The bonds now offered will be used to currently refund senior lien capital improvement program refunding revenue bonds, series 1996, and to terminate a forward interest rate swap agreement.
In conjunction with this transaction, MAA has entered into three forward interest rate swap agreements totaling a notional amount of $150 million, effectively fixing the variable interest rate on the term loan to a fixed rate of 2.
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.
Given the current global economic uncertainty, we are pleased to fix the interest rate for a substantial portion of our floating debt, through the middle of 2012, at a forward interest rate near the 20-year low," said Alan F.
To hedge the Series 2006 bonds, on November 15, 2005, BATA entered into forward interest rate swaps with Ambac Financial Services LLC, JPMorgan, Citibank, and Banc of America, whereby BATA will receive variable rate payments expressed as a function of LIBOR (between 54% of LIBOR +74 basis points to 75% of LIBOR) and make fixed rate payments ranging between 3.

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