DEFINITION of 'Delayed Rate Setting Swap '
An exchange of cash flows, one of which is based on a fixed interest rate and one of which is based on a floating interest rate, in which the spread (difference) between the fixed and floating interest rates is determined when the swap is initiated but the actual interest rate is not determined until later. The swap contract will define the amount of time the investor has to lock the swap's fixed interest rate.
BREAKING DOWN 'Delayed Rate Setting Swap '
A delayed rate setting swap is also called a "deferred rate setting swap" or "spread lock". This type of interestrate swap might be desirable if the investor expects interest rates to change in its favor in the near future but likes the spread currently available. Once the fixed interest rate has been set, a delayed rate setting swap acts like a regular interest rate swap.

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What are interest rate swaps on the OTC market?
Learn about interest rate swaps and how they are traded over the counter, and understand the impact of DoddFrank on swaps ... Read Answer >> 
What is an absolute rate?
An absolute rate is easy to understand once you know the basics of an interest rate swap. An absolute rate is the fixed rate ... Read Answer >> 
Can individual investors profit from interest rate swaps?
Find out how individual investors can speculate on interest rate movements through interest rate swaps by trading fixed rate ... Read Answer >> 
Do interest rate swaps trade on the open market?
Learn how interest rate swaps are traded on the OTC and interbank markets, and how these swaps can be used to arbitrage different ... Read Answer >> 
How do companies benefit from interest rate and currency swaps?
An interest rate swap involves the exchange of cash flows between two parties based on interest payments for a particular ... Read Answer >> 
What would motivate an entity to enter into a swap agreement?
Learn why parties enter into swap agreements to hedge their risks, and understand how the different legs of a swap agreement ... Read Answer >>