A type of transformation that is based on the use of interest rate swaps. More specifically, it is a process whereby an investor “synthetically” transforms a floating rate loan into a fixed rate loan by entering into a swap in which he/ she receives floating rate payments (netting out the payments on the original loan) and pays fixed rate payments. The counterparty to the swap is the fixed rate receiver and the floating rate payer.

For more details, see: using a swap to transform a liability.