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 ?
25 April 2016 - UK-based industrial fuel cell power company AFC Energy (AIM: AFC) has closed an equity swap agreement entered into with financier Lanstead Capital LLP in October 2014, the company said.
"The equity swap agreement is an important step for Mubadala Petroleum's growth strategy in Malaysia and marks our first partnership in Southeast Asia with Shell, an important player in deepwater exploration," Maurizio La Noce, chief executive of Mubadala Petroleum, said in a statement.
The approval will pave the way for Softbank to turn eAccess into a wholly owned subsidiary through an equity swap on Jan.
The race has been dominated by three-year-olds in recent years and Shamooda is preferred to two others of that age with whom she has clashed this season, the Tommy Stack-trained Equity Swap and Andy Oliver's Security Breach.
Brazil Hospitality Group (BOVESPA: BHGR3), a Brazil-based company that owns tourism-based real estate, has entered into a Protocol of Intent with Cesto Participacoes, SA, for an equity swap.
This would allow national authorities to order the sale of the business or part of the business without consulting shareholders, transfer shares or assets to a temporary bridge bank, create a bad bank' to absorb toxic assets or force a debt write-down or debt to equity swap. They will also be allowed to order the replacement of senior management, impose a temporary moratorium on the payment of claims or step in to maintain essential services, such as lending and payment systems (especially in the case of a large bank whose failure would affect the wider economy).
On March 30, the company completed the acquisition of Terra Factor Indonesia and Columbia Chrome Indonesia at a price of Rp 170 billion through debt equity swap.
United States-based Chrysler LLC's (Chrysler) lenders have reached an agreement with the automaker for a debt for equity swap.
The shareholders meetings of the two companies met separately to approve the definitive merger agreement and confirm an equity swap at a 1:1.6 ratio (1.6 shares of WIN for every 1 share of GCT).
Although the use of options or forward contracts clearly would not accomplish this result, (3) a total return equity swap may achieve this objective.
1 through an equity swap deal, the Tokyo-based company said.
1 through an equity swap in a bid to survive intensifying international competition, the two companies said Thursday.