The fixed-rate of interest on the fixed-rate leg of an interest rate swap or a currency swap (or any similar structures). More specifically, swap coupons are quoted by reference to the interest rate on the fixed leg of the agreement and expressed as a spread over risk-free rates (treasury rates in the United States). For example, in intermediary may offer to pay LIBOR flat in return for 7% fixed interest. The rate of 7% is the swap coupon on this swap.

The swap coupon is typically expressed as the semi-annual yield to maturity on the fixed-rate leg against a flat floating rate. To that end, the swap coupon is quoted in terms of a spread over treasury rates of the same maturity. Suppose that the two year treasury note yields 6.5%. The swap spread quoted to a client is then 50 basis points. By convention, swap dealers quote two swap coupons for each tenor swap. The lower is the dealer’s pay rate (a bid rate) and the higher is the dealer’s receive rate (an offer rate).

The swap coupon can be used to determine a given swap spread. For example, if the current par coupon of a LIBOR swap is 5.20% and the par coupon of a CMS swap of the same maturity is 5.75%, so there is a spread of 55 basis points between the CMS par coupon and the plain vanilla LIBOR swap coupon. This spread is termed the CMS spread.

The swap coupon is also known as the swap rate.