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 proceeds will be used to refund the outstanding series 2014A COPs and pay a swap termination payment under an interest rate agreement relating to the 2014A COPs.
The owner of a floating interest rate agreement cannot exercise ownership rights over the assets prior to the crystallisation of the floating charge.
In addition the construction loan requires the Company to enter two interest rate agreement the first agreement which covers the period of construction and lease up and expires in January 2005, is designed to manage the interest exposure of the construction loan.
Forward Interest Rate Agreement. A forward interest rate agreement is derivative financial instrument designed to serve as a hedge against interest rate fluctuations.
a forward interest rate agreement at an interest rate of 10% that will apply to a $100,000 principal.
Specific items included in the forward-type category of derivative financial instruments include forward interest rate agreements, futures contracts interest rate swaps, interest rate collars, and commitments to purchase stock or bonds.
Every borrower should hedge this uniquely low level of interest rates by means of a fixed interest rate agreement , Bosek is convinced.
The framework agreement will not include loans in the obligation and certificates market and interest rate agreements. The municipality will be able to ask providers of certificate and obligation loans parallel to the mini competition for ordinary loans.
Called swaptions for short, these interest rate agreements are usually designed to cushion debt payments in case interest rates rise.
The framework agreement will not include loans in the obligation and certificate market and interest rate agreements.
The framework agreement will not include loans in the obligation and debenture market and interest rate agreements. The contract is for 1 year with an option for the contracting authority to prolong the contract for up until 3 years, with 1 year at a time (total of 4 years).