Interest Rate Swap
An Interest Rate Swap (IRS) is a bilateral derivative contract in which two parties exchange streams of interest payments on a notional principal amount, typically one fixed and one floating, with no exchange of principal.
Example: Example: Company A with floating-rate debt agrees to pay a fixed 2.75% rate on a $100 million notional while receiving a SOFR-based floating rate, with quarterly settlements. Principal is not exchanged.
💬 Comments