What is irs interest rate swap
An interest rate swap is a contract between two parties to exchange all future interest rate payments forthcoming from a bond or loan. It's between corporations, banks, or investors. Swaps are derivative contracts. The value of the swap is derived from the underlying value of the two streams of interest payments. An interest rate swap is a financial agreement between two parties, in which a stream of interest payments is traded for another interest payment stream, based on a specified underlying instrument such as bonds.