A fixed-for-floating interest rate swap in which the swap comes into effect immediately at the trade date, but the swap coupon is not set until a future date. At the trade date, the counterparties agree a specific formula according to which the coupon will be determined. For example, a dealer offers a quote on the coupon of a 3-year swap: 3-year T-note rate plus a given spread (50 basis points). The dealer (who is the fixed-rate payer) may give the buyer (the floating-rate payer) the right to set the the coupon for 6-month resetting periods anytime from the trade date. Once the coupon is set, the quoted rate will be applied during a respective period.

This swap is also known as a delayed rate setting swap.