This Year’s Model – New Lending Practices and Related Accounting Concerns
The first pitfall to avoid is using a standard pay-fixed/receive-floating interest rate swap in conjunction with this loan. This plain-vanil
Switching Caps For Swaps
This lack of an initial payment does not exactly mean that the swap is free. It is not. Economists consider the cost of the swap to be an op
Assessing Interest Rate Caps
Caps do work as advertised, with some qualifications. In a perfect application, the cap buyer would seek a structure corresponding with the
Free Money
The issue gets a little more complicated when interest swaps are introduced into the equation. Interest rate swaps can be used to convert va
Pricing Swaps: Once Upon a Time…
As an example, Exhibit 1 compares the fixed rates on five-year swaps transacted on the first of December 2008 and, for comparative purposes,
Interest Rate Swaps: Accounting vs. Economics
Although accounting rules undergo virtually ongoing review and adjustment, the genesis of the current framework is Statement of Financial Ac