interest rate swap (redirected from Forward-starting swap)

Interest Rate Swap

A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies.

Notes:

The advantage to this is that one company may have access to lower fixed rates and another company may have access to lower floating rates... so they trade.

See also: Basis Rate Swap, Commodity Swap, Currency Swap, Interest Rate, Interest Sensitive Stock, Notional Principal Amount, Spreadlock, Swap, Total Return Swap

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Interest rate swap

A binding agreement between counterparties to exchange periodic interest payments on some predetermined dollar principal, which is called the notional principal amount. For example, one party will pay fixed and receive variable.

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interest rate swap

See swap.