Total Return Swap


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Total Return Swap

A swap in which the two legs are an interest rate, whether fixed or floating, and the return on a set asset. The second party owns the asset, which is usually a set of loans, bonds, or an equity index. The advantage to a total return swap for the payer of the interest rate is that it allows him/her to benefit from the ownership of the asset without owning it. However, if the asset falls in price over the life of the swap, the payer of the interest rate is required to compensate the owner of the asset for the amount the asset has lost.
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With respect to a synthetic long position, the following example illustrates how a total return swap over the shares of a publicly traded stock generally would operate.
The first involved a total return swap with another bank client seeking to free up credit lines with a major client.
The counterparty to a total return swap, the total return receiver, bases what it pays on the returns from a default-free obligation less the negotiated compensation for taking on exposure to the risky debt.
19 March 2013 -- Florida, USA-based retirement services firm The Newport Group said that it has entered into a strategic alliance with non-qualified plan analytics provider Analect Benefit Finance to provide total return swaps to companies that offer executive retirement plans.
During the three months ended June 30, 2006, the company made nine new loans, three CMBS investments and one total return swap investment aggregating $378 million.
Support a myriad of asset classes required by the combined entity including equity, fixed income, OICR, REPO, Equity index futures, bond futures and portfolio swaps instruments, as well as total return SWAP (index and equity), index options, equity options, bond options, CCY options, OTC options and hedge funds.
OL) said on Friday that it has settled a Total Return Swap agreement (TRS) expiring on 3 December 2015, with 4,000,000 common shares in underlying security.
The Total Return Swap agreement entered into on June 4th, 2013 at the same time has been reduced from 2 million shares to 1.
Hedging of bunkers and currency reduced the EBITDA by USD8m, while a gain on a total return swap (TRS) of USD4m boosted the result.
During the three months ended March 31, 2006, the company made six new loans, 31 CMBS investments and a total return swap investment aggregating $439 million, received nine loan satisfactions totaling $52 million and recorded partial repayments on 23 assets totaling $10 million.
Kins also served as the global head of Total Return Swap (TRS) transaction management and oversaw both the Chicago and London TRS portfolio administration product teams.