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HOME       CONTACT       PERSONNEL       COMPANY       LINKS       NEWS           Interest Rate Swap A contact between an Interest Rate Swap Provider and an Issuer to exchange cash flows over a predetermined length of time. The cashflows are calculated based on a fixed or floating rate on a notional amount, which is never exchanged. The Swap Provider agrees to pay a fixed-rate to the Issuer while the Issuer agrees to pay a variable rate to the Swap Provider. The Variable Rate Index can be base upon either LIBOR or BMA scales. LIBOR stands for London Interbank Offered Rate, which is the rate that banks are willing to offer deposits, in a marketable size, to other prime banks in the London Interbank market. BMA stands for the Bond Market Association index, which is a benchmark average of prevailing interest rates for tax-free borrowers.