Counterparties


Also found in: Dictionary.

Counterparties

The parties on either side of an interest rate swap or a currency, equity or commodity swap, or to an options or futures position.

Counterparties

The persons or institutions engaging in a transaction. That is, the buyer and the seller of a good are the counterparties to the sale of that good. While it could apply to any transaction, the term is most common when referring to the counterparties of a swap.
References in periodicals archive ?
For standardised exchange-traded derivatives, the use of central counterparties is common.
Part of the reason for the rating agency initiative regarding hedge funds is self interest (that is, a fee), part the insatiable desire of investors for designer assets, but most risk pros still rely on collateral to "rate" their hedge fund counterparties.
At the margin, the provisions differ from those recommended by the PWG in terms of the range of counterparties covered by the exclusions.
This gives rise to an "expected credit exposure" and "maximum likely credit exposure" that the counterparties should calculate and factor into the pricing of the contract.
An entity should clearly define which instruments are to be used for particular purposes, the extent and limit of their uses and the authorized counterparties with whom the entity may enter into derivatives transactions.
For plan sponsors used to hiring investment managers at a disclosed rate, dealing with counterparties who won't divulge their returns on derivatives transactions can be discomforting.
There was no simple way to list or search LDC's counterparties and no single, authoritative source of counterparty standard settlement instructions (SSI) existed.
Furthermore, this breakdown in market discipline reflected weaknesses in risk-management practices by LTCM's counterparties that were also evident, albeit to a lesser degree, in their dealings with other highly leveraged firms.
Thus, the critical factor in evaluating GSFP's credit quality is that of its counterparties.
There's no credit-quality standard requiring an institution to accept only counterparties of AA or better, but in the last five years, the quality of credit risk that sponsors are willing to accept has risen.
The ratings are based on the credit quality of the reference portfolio, the credit enhancement provided by subordination for each tranche, the strength of the counterparties, and the transaction's sound financial and legal structures.
Aron's obligations; rated 'AA-' with a Stable Outlook) and the commodity swap counterparties (Royal Bank of Scotland plc [RBS] rated 'AA+' with a Stable Outlook by Fitch and Royal Bank of Canada Europe Limited [RBCEL] rated 'AA' with a Stable Outlook by Fitch).