LIBOR Flat

AAA

DEFINITION of 'LIBOR Flat'

An interest rate benchmark used to establish the floating interest rate that is paid on the notional principal in an interest-rate swap. LIBOR flat has no spread added to it and represents the best interest rate available in the current market. It is the most common reference on which other interest rates are based.

INVESTOPEDIA EXPLAINS 'LIBOR Flat'

LIBOR is the London Interbank Offered Rate, an interest rate at which banks can borrow money from each other. The rate changes daily. Often, a spread is added to LIBOR. This is an additional percentage of interest that reflects the risk of lending to a particular borrower. LIBOR flat has no spread added to it and represents the best interest rate available in the current market. It is the most common reference on which other interest rates are based.

RELATED TERMS
  1. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate ...
  2. LIBOR Curve

    A graphical representation of various maturities of the London ...
  3. Interest Rate Swap

    An agreement between two parties (known as counterparties) where ...
  4. Notional Principal Amount

    In an interest rate swap, the predetermined dollar amounts on ...
  5. Risk-Free Rate Of Return

    The theoretical rate of return of an investment with zero risk. ...
  6. Swap

    Traditionally, the exchange of one security for another to change ...
Related Articles
  1. Options & Futures

    What is the difference between LIBOR, ...

  2. Credit & Loans

    How Interest Rate Cuts Affect Consumers

  3. Options & Futures

    An Introduction To LIBOR

  4. ISDA Master Agreement
    Investing Basics

    ISDA Master Agreement

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center