Derivatives
NDS
March 29, 2021
Derivatives
Non-Path-Dependent Option
March 29, 2021

An interest rate swap (specifically an off-market swap) where one or both of the assets underlying the swap sell/sells at a discount or a premium, i.e., at a non-market rate. The fixed rate is either above or below the prevailing swap rate. The difference is usually paid by or to either party upfront.

The non-par swap is used usually to hedge debt issues against changes in interest rates thereafter.

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