Floating-rate payer

(redirected from Fixed Rate Receiver)

Floating-rate payer

In an interest rate swap, the counterparty who pays a rate based on a reference rate, usually in exchange for a fixed-rate payment.

Floating-Rate Payer

In a plain vanilla swap, the investor who pays the floating interest rate and receives the fixed interest rate. The two legs of a plain vanilla swap are a fixed interest rate, say 3.5%, and a floating interest rate, say LIBOR + 0.5%. In such a swap, the only things traded are the two interest rates, which are calculated over a notional value. The floating rate payer gives LIBOR + 0.5% of the notional value to the fixed rate payer and, in return, receives 3.5% of the same notional value. Each party pays the other at set intervals over the life of the swap.
References in periodicals archive ?
At expiration, the contracts physically deliver into an OTC interest rate swap cleared by CME Clearing, with the long position holder becoming fixed rate receiver and the short position holder becoming fixed rate payer.
At expiration the holder of a long futures position will become the fixed rate receiver and floating rate payer in an OTC interest rate swap cleared by CME Clearing.