An index amortizing swap that is structured in a reversed way so that if the underlying reference rate decreases, the floating rate payment will increase, and vice versa. It is a fixed-for-floating interest rate swap whose floating rate payments are linked to an index such as CMT or LIBOR and which increase if the index moves down and decreases in the opposite scenario.

This swap can provide a hedge against repayments on conditionally amortizing securities/ investments that may be impacted “negatively ” by changes in interest rates, such as mortgage-backed bonds. An issuer can also combine such a swap with a mortgage pass-through security in order to offset mortgage prepayment risk.