An interest rate swap whereby the notional principal amount grows over its time to expiration. Such a swap is particularly fitting in a case where a fixed-rate payer has expanding working capital requirements. The accreting principal swap has a wide variety of names, including: appreciating swap, construction loan swap, escalating swap, escalating principal swap, drawdown swap, staged drawdown swap, accreting swap, set-up swap, and accumulation swap.
August 10, 2024
