Financial Analysis
Tobin’s Q
May 12, 2021
Banking
Rehypothecation
May 12, 2021

A swap agreement made between a municipality (a city or town local council) and a financial intermediary, in which the former is the fixed rate payer and the latter is the floating rate payer. However, the floating rate is (and must be) exactly equal to a floating rate liability on a municipal debt.

The zero basis risk swap is also called a zebra swap, a perfect swap, a zero basis risk swap, and an actual rate swap.

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