How Does a Borrower Who Desires a Swap Contract Find

question 1

Essay

How does a borrower who desires a swap contract find a counterparty with whom to swap interest payments with?

---

Definitions:

Present Value

The present-day worth of future monetary amounts or cash flow series, determined by applying a specified rate of return.

Operating Cash Flows

The cash generated from a company’s normal business operations, indicating its capability to generate sufficient revenue to maintain and grow operations.

Pre-tax Net Income

The amount of income earned by a company before taxes are deducted, representing its profitability.

Incremental Cash Flows

Additional cash flows from a new project or investment, considered when evaluating the financial viability of that project.