An asset swap that involves the exchange of a swap rate for a bond yield. The yield/ yield spread is the yield of the bond less the swap rate of a matched maturity swap. For an investor to take a long asset swap position or a long swap spread position, he will have to own a bond against a hedge in swaps. This can be done by purchasing a bond and paying fixed on a swap to the same maturity.

As such, the matched maturity asset swapper is exposed only to the spread between the swap rate and the bond yield, rather than to market direction. The investor will make money when the bond yield falls relative to the swap rate. Otherwise, the investor would incur losses.

This swap is sometimes known as a yield-yield asset swap.