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.
The bonds remain synthetically fixed through an interest rate agreement with UBS AG ('AA'; Rating Watch Negative by Fitch).
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.
Every borrower should hedge this uniquely low level of interest rates by means of a fixed interest rate agreement , Bosek is convinced.
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).
The third quarter accounting adjustment charges will reduce the Company's mortgage premium and interest rate agreement premium balances.
The notes are secured by, among other things, a first lien mortgage on Woodfield Mall and an interest rate agreement pledged by the borrower to the trustee.
Town and Country have entered into an interest rate agreement with AIG Financial Products Corp.
Increases in LIBOR, which reduce ECC Capital's net interest rate spread on its loans, increase the value and cash flows received under these derivative interest rate agreements, offsetting, in part, the reduced interest income from ECC Capital's loans.
Treasury securities 33,485 48,009 0 Interest rate agreements 1,627 2,517 1,627 Cash and cash equivalents 52,129 68,484 32,202 Receivables and other assets 44,852 42,575 37,312 Total assets $2,456,974 $2,832,448 $3,713,691 Short-term debt $1,033,642 $1,257,570 $2,288,018 Long-term debt 1,171,141 1,305,560 1,081,279 Payables and other liabilities 7,993 14,528 14,696 Stockholders' equity 244,198 254,790 329,698 Total liabilities and stockholders' equity $2,456,974 $2,832,448 $3,713,691 Residential mortgage assets 99.
In April 2005, in anticipation of the issuance of the Senior Notes, ACS entered into forward interest rate agreements to hedge the variability of future interest payments.