Coverage Period

The interim interval in a swap or other periodic reset agreement when a pre-defined set of terms is applicable. For example, in a forward starting swap that resets semiannually and comes into effect 40 days from now and lasts for 3 years, the swap starts will be effective in earnest after 40 days and its coverage period will cover six-month interim intervals. Therefore, the swap spans six coverage periods each of which lasts for six months and has its own rate fixing (among other specifications).