The lifetime of a swap at the end of which parties to the swap no longer pay obligations since it ceases to exist. For example, a swap may have a 3-year tenor during which the two counterparties exchange payments based on two different rates every 6 months. This swap tenor encompasses 6 fixing dates (resetting points) at each of which net payment is made by the net payer counterparty to the net receiver counterparty. For this particular meaning, the swap tenor is also called a swap term.
A swap tenor may also refer to a swap’s coupon frequency. In practice, these tenors are often less than a year. A common tenor is three months. So instead of exchanging cash flows once a year, the counterparties do so four times per year, and so on. Other popular tenors are six months and one month. Another common arrangement is the semi-quarterly coupon frequency in which the swap has a 6-month fixed leg and 3-month floating leg. Whatever the frequency is, the two legs of a swap need not have the same tenor.
