Interest rate agreement

Interest rate agreement

An over the counter agreement whereby one party, for an up-front premium, agrees to compensate the other at specific time periods if a designated interest rate (the reference rate) is different from a predetermined level (the strike rate.) Also called a FRA (pronounced like ‘draw’) or forward rate agreement.

Interest Rate Agreement

A transaction between two investors in which one (Investor A) agrees to compensate another (Investor B) if a certain variable interest rate, known as the reference rate, rises above some agreed-upon strike rate. Investor A makes this compensation at certain periods of time over the life of the agreement each time the reference rate exceeds the strike. In exchange, Investor B gives Investor A a premium or purchase price for the agreement. See also: Interest rate swap.
References in periodicals archive ?
The owner of a floating interest rate agreement cannot exercise ownership rights over the assets prior to the crystallisation of the floating charge.
In addition the construction loan requires the Company to enter two interest rate agreement the first agreement which covers the period of construction and lease up and expires in January 2005, is designed to manage the interest exposure of the construction loan.
The bonds remain synthetically fixed through an interest rate agreement with UBS AG ('AA'; Rating Watch Negative by Fitch).
A forward interest rate agreement is derivative financial instrument designed to serve as a hedge against interest rate fluctuations.
The $450 million unsecured variable interest rate agreement is comprised of a $250 million revolving loan facility and a $200 million term loan.
Following the series 2000 bond issue, BHI entered into a five-year interest rate agreement with a cap of 7% and a floor of 3.
Debt service on the series 2004 bonds will be synthetically fixed through an interest rate agreement with UBS AG ('AA+', Stable Rating Outlook by Fitch).
Every borrower should hedge this uniquely low level of interest rates by means of a fixed interest rate agreement , Bosek is convinced.
The third quarter accounting adjustment charges will reduce the Company's mortgage premium and interest rate agreement premium balances.
The framework agreement will not include loans in the obligation and certificates market and interest rate agreements.
Called swaptions for short, these interest rate agreements are usually designed to cushion debt payments in case interest rates rise.
The framework agreement will not include loans in the obligation and certificate market and interest rate agreements.