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LSDefine

Simple English definitions for legal terms

interest-rate swap

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A quick definition of interest-rate swap:

An interest-rate swap is an agreement between two parties to exchange interest payments or obligations. This is done to manage risk, speculate on interest-rate changes, or convert an instrument from a fixed to a floating rate or vice versa. The parties involved are called counterparties. In a plain-vanilla swap, one party pays a fixed interest rate while the other pays a floating interest rate based on the principal amount of the underlying debt. The notional amount of the swap, which is the underlying debt, does not change hands, only the interest payments are exchanged.

A more thorough explanation:

An interest-rate swap is an agreement between two parties to exchange interest receipts or interest-payment obligations. This is usually done to adjust one's risk exposure, speculate on interest-rate changes, or convert an instrument or obligation from a fixed to a floating rate or vice versa. The parties involved in this agreement are called "counterparties."

A plain-vanilla swap is a typical interest-rate swap that involves one counterparty paying a fixed interest rate while the other assumes a floating interest rate based on the amount of the principal of the underlying debt. The underlying debt, called the "notional" amount of the swap, does not change hands, only the interest payments are exchanged.

Company A has a loan with a fixed interest rate of 5%, while Company B has a loan with a floating interest rate based on the prime rate. Company A is concerned that interest rates may rise, while Company B is concerned that interest rates may fall. They enter into an interest-rate swap agreement where Company A pays Company B a fixed interest rate of 4%, and Company B pays Company A a floating interest rate based on the prime rate. This way, Company A can protect itself from rising interest rates, while Company B can protect itself from falling interest rates.

This example illustrates how an interest-rate swap can be used to adjust one's risk exposure and protect against potential losses due to interest-rate changes.

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9:31
some people hate him. some people love him, but he a real one: https://youtu.be/w5oEqiVQcF4?t=173
9:32
[kevin oleary]
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
WorthlessAttractiveZombie
9:34
I mean if Fordham doesn't release today I will purposefully get on a train, go to new york, and then take the stinkiest shit inside the admission office's toilet (potentially clogging it and forcing them to get a plumber)
IS IT ONLY ON MY END WHY DID THAT SEND TEN MILLION TIMES
HELLO
WorthlessAttractiveZombie
9:35
it sent a million times lol
WHAT HAPPENED
yeah i thought you were tweaking for a second
i'm so sorry everyone what the actual fuck this website hates me
WorthlessAttractiveZombie
9:35
Jack's just tweaking on LSD no biggie
to be fair this accurately represents my mental state
election day psychosis coming in hot (fordham)
usc pls pull through .....
i literally just need one A so i can relax before my ED decision
WorthlessAttractiveZombie
9:38
oh that's right USC might release
soapy
9:43
USC still has not looked at my app
WorthlessAttractiveZombie
9:43
when did you submit soapy?
soapy
9:44
10/16
WorthlessAttractiveZombie
9:44
to be fair it took them almost 2 months for me to go under review
soapy
9:44
Feelin a bit stressed, as I've got no date change for Michigan either despite applying 10/7
WorthlessAttractiveZombie
9:45
I have not had a date change either for Mich but I've seen people get in without one so who knows
I applied 9/25 to like 6 schools and some (Houston) have no date change yet so dw
soapy
9:46
But do people get in without addresses going long?
WorthlessAttractiveZombie
9:46
it's tough to tell because a lot of people type out their addresses long to begin with
soapy
9:46
Ah. I didn't. Looking back, my Mich supplement kind of sucks, so there's that
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