An extendible swap which combines a fixed receiver swap and a receiver swaption. For example, an investor buys a swap whereby he receives 5% and pays a floating rate (LIBOR) for two years. The swap is combined with a swaption that gives the buyer the right to lock in the fixed rate (5%) for an extension of three years in the future. If rates decline below 5%, the buyer has the right to exercise the receiver swaption which allows him to continue receiving a minimum of 5% over the extension period. As such, the original swap is said to have been extended from three to five years. However, if rates rise, the swaption will not be exercised (it expires worthless).