A swap which has a warrant attached thereto, and whereby a counterparty can increase the notional amount of the swap to cater for obligations arising from an exposure to a bond warrant exercise.

In other words, this swap allows an issuer of a fixed-rate bond to pay a floating rate in the event that the issuer exercises another warrant that has the effect of prolonging the life the life of the bond.

The attached warrant, therefore, impacts the value/ price terms of a respective swap.