Commodity Swap - receive commodity fixed price and pay fixed interest rate?
Hi all, I'm wondering is it a common practice for the commodity swap to have the client receive fixed commodity price and pay fixed interest rate? ie : 1 leg to receive fixed commodity price and pay floating commodity market price (hedging the commodity exposure as a producer) 1 leg to pay fixed interest rate and receive floating interest rate (hedging the floating rate debt)
From where I come from , commodity swap is often constructed only the commodity leg, without the interest rate leg.
I derived the idea from equity swap. Say a portfolio manager wanted an equity exposure, he calls the bank to enter into an equity swap which he will receive the return of the equity and pay fixed interest rate.
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