Basic Interets Rate Swap
A swap is a derivative in which one party exchanges a stream of interest payments for another party’s stream of cash flows. Interest rate swaps can be used by hedgers to manage their fixed or floating assets and liabilities. They can also be used by speculators to replicate unfunded bond exposures to profit from changes in interest rates. Interest rate swaps are very popular and highly liquid instruments.
Most loans are, either in whole or in part, likely to be on an amortising basis which may mean that the actual Euro swap rate will differ from those indicated above. Bespoke quotes can be provided by CLP.
Ask swap rates quoted as of close of London business. US$ is quoted annual money actual/360 basis against 3 month Libor. £ are quoted on a semi-annual actual/365 basis against 6 month Libor, Euro quoted on an annual bond 30/360 basis against 6 months Euribor/Libor with the excpetion of the 1 year rate which is quoted against 3 months Euribor/Libor.
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