An OVERTHECOUNTER NONPAR SWAP where the receiver of fixed INTEREST RATES is granted an upfront payment by the floating rate payer in exchange for accepting a lower ongoing fixed rate inflow. See also PREMIUM SWAP.

More On This Topic

Link to This Definition
Did you find this definition of DISCOUNT SWAP helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary