Rollercoaster Swap

Rollercoaster Swap

A seasonal swap providing flexibility of payments at predetermined periods in order to best meet cyclical financing needs or other requirements of the counterparty.

Notes:

This swap has fluctuating payments so that the counterparty can match cash flows to transfers, periodic financing obligations or seasonal factors.

For example, an international company who sells lawn mowers might have a keen interest in a rollercoaster swap, because it can match swap payments with the seasonal demand for lawn mowers.

See also: Accreting Principal Swap, Index Amortizing Swap, Swap