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Derivatives

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  • January 17, 2023
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Balance Guaranteed LIBOR-Base Rate Swap

A balance guaranteed swap in which one leg pays LIBOR plus a spread, while the other leg pays the average official base rate during a respective period. The LIBOR leg pays the coupon fixed at the beginning of the period, but the base rate leg pays a fixed amount at the end of the period. This agreement allows the notional principal amount to be any value within a pre-determined range. The LIBOR base rate payer has the right to determine the size of the notional principal at the beginning of each resetting period.


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