Swap Agreement
/ˈswɒp əˈɡriːmənt/
Definitions
- (n.) A bilateral contract in which parties agree to exchange financial instruments, cash flows, or liabilities over a set period according to predetermined terms.
The companies entered into a swap agreement to exchange interest payments to manage their exposure to rate fluctuations.
Forms
- swap agreements
Related terms
See also
Commentary
Swap agreements are key in managing financial risk and require precise terms regarding payment schedules and underlying assets to avoid ambiguity.
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