A specialized forward rate agreement that protects the parties from future changes in the spread between interest rates involving different currencies. An indexed rate, plus or minus the agreed spread, is used at settlement. It can also be a forward that settles at a basis between two previously agreed upon rates.
Related information about forward spread agreement:
- What is forward spread agreement? definition and meaning
Definition of forward spread agreement: A specialized forward rate agreement that protects the parties from future changes in the spread between interest rates ...
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The Forward Spread Agreement is an innovative product, which allows the customer to take position on the spread between the government T-bond yield curve ...
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(1) A specialized forward rate agreement which settles at the index rate (usually LIBOR) at the time of settlement plus or minus an agreed spread. (2) A forward ...
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Forward Spread Agreement: The counterparties of a forward spread agreement contract into a spread between two forward rate agreement rates applied to a ...
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Some investors may protect themselves from changes in the spread by signing a forward spread agreement. It can be used to lock in a range of rates between ...
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- Derivative and Hybrid Terms
Forward spread agreement: The counterparties contract into a spread between two forward rate agreement rates applied to a nominal amount of one currency.
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FORWARD SPREAD AGREEMENT. A contract in which counterparties contract into a spread between two variable rates, usually Libors, applied to a nominal ...