Derivatives

Interest-Only Swap

July 1, 2020
Business

Shoestring Operation

July 1, 2020

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An amortizing swap in which an irregular payment streak is exchanged for a regular payment flow of the same present value. To make both sets of flows equal, the swap notional principal should be adjusted over its time to maturity.

An annuity swap may also refer to a currency swap in which only interest or coupon payments are exchanged.

This swap is also known as a coupon only swap.

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