Interest Rate Swap
/ˈɪn.trəst reɪt swɒp/
Definitions
- (n.) A financial derivative agreement between two parties to exchange interest payment obligations, typically swapping fixed for floating interest rates.
The company entered into an interest rate swap to hedge against rising borrowing costs.
Forms
- interest rate swap
- interest rate swaps
Related terms
See also
Commentary
In drafting, clearly specify the reference rates and payment frequencies to avoid ambiguity in interest rate swap agreements.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.