Debt Quotes....What Does "Over Swaps" Mean Exactly?
I'm getting some debt quotes on an asset, what does it mean when someone quotes "over swaps".
How is this compared to "over LIBOR" and "over Treasuries" which are readily available rates? What's the difference between swaps and treasuries?
Over the swap rate? I feel like your answering your own question.
Same thing as 200 bps over the 10-year...
Like, is a "swap" rate a fixed rate instrument? What exactly are we getting here as a borrower?
It seems like a swap is used to change a "floating rate loan" into a "fixed rate loan".
If someone is quoting something over a swap, is this a fixed rate loan?
Also - how do people mechanically "fix" a floating rate loan (i.e. change a floater to a fixed)?
Yes, the swap rate is a fixed rate loan. It prices in some risk that interest rates will increase (or decrease) over the life of the loan.
Qui in eum voluptatibus. Culpa in odio saepe occaecati quaerat nulla. Illo neque vitae voluptatem et inventore maiores sapiente. Quia est ex aut fugiat nostrum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...