Definitions for "Interest rate Swaps"
Keywords:  swap, floating, versa, vice, cashflows
An agreement to change interest rate exposures from floating to fixed or vice versa. There is no exchange of the principal, but only the interest cashflows.
An agreement to pay or receive a sum of money calculated by reference to the difference between a floating rate of interest and a fixed rate of interest, based on a notional principal sum. This definition relates to a plain vanilla swap, which is the simplest form of interest rate swap available.
An arrangement that requires both sides of the transaction to make payments to each other based on two different interest rates. The most commonly traded requires one side to pay a fixed rate and the other to pay a floating rate.