Series 50: Forward Swaps

Taken from our Series 50 Online Guide

Forward Swaps

A forward swap is an interest rate swap where the exchange of cash flows occurs at some date in the future. This future date is called the effective date. A municipality may enter into a forward swap to lock into current rates for the future. This is usually done when a municipality wants to take advantage of the current lower rates but cannot advance refund a current bond issue because of legal constraints. For instance, federal law only allows municipal entities to advance refund a bond one t

Since you're reading about Series 50: Forward Swaps, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 50
Please Enable Javascript
to view this content!