Swaption

Swaption

Swaption

Options on interest rate swaps. The buyer of a swaption has the right to enter into an interest rate swap agreement by some specified date in the ‘ future. The swaption agreement will specify whether the buyer of the swaption will be a fixed-rate receiver or a fixed-rate payer. The writer of the swaption becomes the counterparty to the swap if the buyer exercises.

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Swap sale

Swap sale

Swap sale

Also called a swap assignment, a transaction that ends one counterparty’s role in an interest rate swap by substituting a new counterparty whose credit is acceptable to the other original counterparty.

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Swap reversal

Swap reversal

Swap reversal

An interest rate swap designed to end a counterparty’s role in another interest rate swap, accomplished by counterbalancing the original swap in maturity, reference rate, and notional amount.

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Swap buy-back

Swap buy-back

Swap buy-back

The sale of an interest rate swap by one counterparty to the other, effectively ending the swap.

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Swap

Swap

Swap

An arrangement whereby two companies lend to each other on different terms, e.g. in different currencies, and or at different interest rates, fixed or floating.

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Sustainable growth rate

Sustainable growth rate

Sustainable growth rate

Maximum rate of growth a firm can sustain without increasing financial leverage.

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