A variant of interest rate swap which, contrary to indexed principal swaps, amortizes as interest rates fall. In other words, the amortization rate in such a swap is inversely related to interest rates. As interest rates increase, the notional principal amount of the swap is reduced. That is, the lower the interest rates, the lower the decrease in notional principal and vice versa.

This type of swaps is instrumental to hedge against repayment risk in interest-rate sensitive instruments such as mortgage-backed bonds. The floating rate payment will increase should the reference rate decrease.