Swap Contract definition: Copy, customize, and use instantly
Introduction
The term "Swap Contract" refers to a financial agreement in which two parties agree to exchange cash flows or other financial instruments over a specific period, typically to hedge risk or for speculative purposes. Swap contracts can involve various types of assets, including interest rates, currencies, commodities, and more. The contract's terms are essential in defining the obligations and rights of each party.
Below are various examples of how "Swap Contract" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Swap Contract" for interest rate swaps
This definition ties "Swap Contract" to an agreement that involves the exchange of fixed and floating interest rate payments.
"Swap Contract" means an agreement between two parties to exchange interest rate payments, where one party pays a fixed rate and the other pays a floating rate, based on a notional principal amount.
Definition of "Swap Contract" for currency swaps
This definition links "Swap Contract" to an agreement where two parties exchange cash flows in different currencies.
"Swap Contract" refers to an agreement where two parties exchange cash flows in different currencies, typically involving the exchange of principal and interest payments based on exchange rates.
Definition of "Swap Contract" for commodity swaps
This definition connects "Swap Contract" to agreements where parties exchange cash flows based on commodity prices.
"Swap Contract" means an agreement where two parties agree to exchange cash flows based on the price of a commodity, such as oil, gas, or metals, to hedge against price fluctuations.
Definition of "Swap Contract" for equity swaps
This definition ties "Swap Contract" to agreements in which two parties exchange cash flows based on the performance of equity indexes or individual stocks.
"Swap Contract" refers to a contract where two parties agree to exchange cash flows based on the returns of a specific equity index or stock, often used for hedging or investment purposes.
Definition of "Swap Contract" for total return swaps
This definition links "Swap Contract" to a total return swap, where one party agrees to pay the total return of an asset in exchange for a fixed or floating payment.
"Swap Contract" means a total return swap, where one party agrees to pay the total return of a specified asset, including income and capital gains, in exchange for periodic fixed or floating payments.
Definition of "Swap Contract" for inflation swaps
This definition connects "Swap Contract" to agreements where parties exchange cash flows based on inflation rates.
"Swap Contract" refers to an agreement in which one party agrees to pay a cash flow based on an inflation index, while the other pays a fixed or floating rate, used to hedge inflation risks.
Definition of "Swap Contract" for credit default swaps
This definition ties "Swap Contract" to credit default swaps, where one party agrees to compensate the other in the event of a credit default.
"Swap Contract" means a credit default swap, where one party agrees to pay a specified amount if a credit event occurs, such as the default of a borrower or issuer.
Definition of "Swap Contract" for cross-currency swaps
This definition links "Swap Contract" to cross-currency swaps, where two parties exchange cash flows in different currencies, typically including both principal and interest payments.
"Swap Contract" refers to a cross-currency swap, where two parties exchange both principal and interest payments in different currencies to hedge or speculate on currency fluctuations.
Definition of "Swap Contract" for a fixed-for-floating swap
This definition connects "Swap Contract" to an agreement where one party pays a fixed interest rate, and the other pays a floating rate.
"Swap Contract" means an agreement where one party pays a fixed interest rate on a notional amount, while the other party pays a floating interest rate, usually based on a benchmark like LIBOR.
Definition of "Swap Contract" for a forward swap
This definition ties "Swap Contract" to a forward swap, where the contract's terms are agreed upon today, but the swap is executed at a future date.
"Swap Contract" refers to a forward swap, where two parties agree to enter into a swap contract at a future date, with terms and conditions set in advance.
Definition of "Swap Contract" for a swaption
This definition links "Swap Contract" to a swaption, which is an option to enter into a swap contract at a future date.
"Swap Contract" means a swaption, where one party has the right but not the obligation to enter into a swap contract on specified terms at a future date.
Definition of "Swap Contract" for interest rate floor swaps
This definition connects "Swap Contract" to an agreement where the buyer receives payments if the floating interest rate falls below a specified level.
"Swap Contract" refers to an interest rate floor swap, where the buyer receives payments if the floating interest rate falls below a predefined level, providing a hedge against falling interest rates.
Definition of "Swap Contract" for basis swaps
This definition ties "Swap Contract" to a basis swap, where two parties exchange floating interest rate payments based on different benchmarks.
"Swap Contract" means a basis swap, where two parties agree to exchange floating interest rate payments based on different benchmark rates, such as LIBOR and the Federal Funds rate.
Definition of "Swap Contract" for commodity-linked swaps
This definition connects "Swap Contract" to commodity-linked swaps, where the cash flows are tied to the prices of specific commodities.
"Swap Contract" refers to a commodity-linked swap, where two parties agree to exchange cash flows based on the price movements of a specific commodity, such as agricultural products or energy resources.
Definition of "Swap Contract" for payment-in-kind swaps
This definition ties "Swap Contract" to payment-in-kind swaps, where payments are made in additional securities rather than cash.
"Swap Contract" means a payment-in-kind swap, where one party makes payments in the form of additional securities or instruments instead of cash, typically involving debt or equity securities.
Definition of "Swap Contract" for floating-for-floating swaps
This definition connects "Swap Contract" to floating-for-floating swaps, where both parties pay floating interest rates, but based on different reference rates.
"Swap Contract" refers to a floating-for-floating swap, where both parties exchange payments of floating interest rates based on different reference rates, such as LIBOR versus SOFR.
Definition of "Swap Contract" for a leveraged swap
This definition ties "Swap Contract" to a leveraged swap, where one party takes on greater risk to achieve higher potential returns.
"Swap Contract" means a leveraged swap, where one party takes on greater exposure to market movements by using leverage to amplify the potential returns or risks in the swap arrangement.
Definition of "Swap Contract" for inflation-linked swaps
This definition links "Swap Contract" to inflation-linked swaps, where the cash flows are adjusted for changes in inflation.
"Swap Contract" refers to an inflation-linked swap, where one party agrees to pay cash flows based on an inflation index, while the other pays a fixed rate, to hedge against inflation risk.
Definition of "Swap Contract" for total return swaps on debt instruments
This definition connects "Swap Contract" to total return swaps specifically tied to debt instruments, such as bonds.
"Swap Contract" means a total return swap involving debt instruments, where one party agrees to pay the total return on a debt instrument, including interest and capital gains, in exchange for a fixed or floating payment.
Definition of "Swap Contract" for cross-commodity swaps
This definition ties "Swap Contract" to cross-commodity swaps, where two parties exchange cash flows based on different commodity prices.
"Swap Contract" refers to a cross-commodity swap, where two parties exchange cash flows based on the price movements of different commodities, such as oil and metals.
Definition of "Swap Contract" for climate risk swaps
This definition connects "Swap Contract" to swaps that hedge against risks related to climate change or environmental conditions.
"Swap Contract" means a climate risk swap, where one party agrees to pay cash flows based on climate or environmental data, while the other party pays a fixed or floating amount.
Definition of "Swap Contract" for energy swaps
This definition links "Swap Contract" to energy swaps, where two parties agree to exchange cash flows based on the price of energy commodities, such as oil or electricity.
"Swap Contract" refers to an energy swap, where two parties exchange cash flows tied to the price of energy commodities, typically used to hedge against energy price fluctuations.
Definition of "Swap Contract" for currency swaps with interest rate exchanges
This definition ties "Swap Contract" to currency swaps that involve both the exchange of principal in different currencies and interest payments based on different rates.
"Swap Contract" means a currency swap involving both the exchange of principal in different currencies and the exchange of interest payments based on different interest rate structures.
Definition of "Swap Contract" for multi-currency swaps
This definition connects "Swap Contract" to multi-currency swaps, where more than two currencies are involved in the exchange of cash flows.
"Swap Contract" refers to a multi-currency swap, where three or more currencies are involved in the exchange of interest rate payments or other financial obligations.
Definition of "Swap Contract" for swap agreements with collateral arrangements
This definition ties "Swap Contract" to agreements where collateral is used to secure the terms of the swap.
"Swap Contract" means a swap agreement where collateral is posted by one or both parties to secure the performance of the terms of the contract, ensuring risk mitigation.
Definition of "Swap Contract" for a non-deliverable swap
This definition links "Swap Contract" to a non-deliverable swap, where no physical exchange of the underlying asset occurs.
"Swap Contract" refers to a non-deliverable swap, where the parties agree to exchange cash flows based on the performance of an underlying asset but without the physical exchange of the asset itself.
Definition of "Swap Contract" for swaps with embedded options
This definition connects "Swap Contract" to swaps that contain embedded options, providing additional flexibility or opportunities.
"Swap Contract" means a swap that includes embedded options, where one or both parties have the right to modify the terms of the swap at certain points during its life.
Definition of "Swap Contract" for short-term swaps
This definition ties "Swap Contract" to agreements that are set for a short duration, typically under one year.
"Swap Contract" refers to a short-term swap, where the swap agreement has a duration of less than one year, often used for short-term hedging or liquidity management.
Definition of "Swap Contract" for government bonds swaps
This definition connects "Swap Contract" to swaps involving government bonds, where the returns are based on government debt instruments.
"Swap Contract" means a swap involving government bonds, where two parties exchange payments based on the returns of specific government debt instruments, often used to hedge sovereign risk.
Definition of "Swap Contract" for swaps used in leveraged buyouts
This definition ties "Swap Contract" to swaps used in leveraged buyouts, where swaps are employed to manage financial risks during the buyout process.
"Swap Contract" refers to a swap used in a leveraged buyout (LBO) transaction, where parties exchange financial obligations to manage interest rate or currency risks associated with the LBO structure.
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