equity swap

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Equity swap

A swap in which the cash flows exchanged are based on the total return on some stock market index and an interest rate (either a fixed rate or floating rate). Related: Interest rate swap.

Equity Swap

A swap in which the at least one of the two legs is the cash flow from some equity instrument like a stock. For example, the counterparties to an equity swap may agree to exchange the dividends from two stocks of roughly the same value. Alternatively, they may exchange the capital gains from a stock index for an interest rate calculated over a nominal value. Equity swaps may take a variety of forms, but all exist in order to diversify the cash flows of the parties without requiring them to buy anything new. An equity swap may also help one or both parties legally avoid taxation.

equity swap

An exchange of the potential appreciation of an equity's value and dividends for a guaranteed return plus any decrease in the value of the equity. An equity swap permits an equity holder a guaranteed return but demands the holder give up all rights to appreciation and dividend income.
References in periodicals archive ?
all outstanding equity swaps held with Lanstead over the share capital
Harmony Securities is available across various products, including cash equities, equity swaps, corporate and government bonds, municipal bonds and treasury bills, and has been designed to meet industry processing requirements as well as forthcoming regulatory changes, such as T+2 settlement.
NoDivRisk(TM) EFP trade is an exchange traded, central counter party cleared, economic equivalent to OTC equity swaps, equity repos and securities lending transactions.
Hungry for alpha, hedge funds are turning to equity swaps and synthetic prime to access emerging markets offering attractive spreads and easily identifiable risk arbitrage opportunities.
The company said that the fund, The HSBC GIF European Alpha Equity fund, would be launched next month, and that it would seek opportunities across Europe through equities and equity swaps.
As noted above, debt for equity swaps are refinancing deals where a company's creditors, such as banks, agree to cancel some/all of their debt in exchange for equity.
and two other units wholly owned subsidiaries through equity swaps on Aug.
Despite its rather broad language, however, an argument exists that the phrase was not intended to include long positions in equity swaps.
We refer to executive equity swaps as single equity swaps used by senior management.
Equity swaps raise a number of significant legal issues under federal securities and commodities laws that are beyond the scope of this article.
Derivatives, like equity swaps, may enable a plan sponsor to capture a view on a market without disrupting the underlying manager.
Incidence of Use and Region of Underlying for Equity Swaps Business