An asset swap package where an investor pays par (100%) to an asset swap seller for a particular fixed-coupon bond issued by a specific reference entity (name), in order to obtain exposure to the par notional amount of that bond. The asset swap seller pays the buyer floating payments (such as LIBOR or any reference rate) plus the asset swap spread either until maturity date or until the default of the reference entity. The buyer receives the floating payments on preset dates- not necessarily coincident with the coupon dates in terms of frequency or synchronization-and the par value of the bond at maturity.

In the event of default, the buyer receives a cash amount (credit protection), and the contract is over. For example, assume a bond trades at 99.20% yield (including accrued interest), the buyer pays 100% to the seller, of which 99.20% is used to purchase the bond and the difference (0.8%) is an upfront premium (goes to the seller).