Absolute Rate

Absolute rate is a combination of a percentage of an interest rate swap that is fixed, as well as the percentage that is flexible or floating. Interest rate swaps are used by companies to hedge against sudden and undesirable fluctuations in interest rates. So if the swap deal is given at a premium of 5% and a flexible rate of 2% from a flexible rate such as LIBOR or EURIBOR is added to the mix, this gives an absolute rate of 7%.

By |2018-09-04T14:08:30+00:00September 4th, 2018|0 Comments

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