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. Spread

    1. The difference between the bid and the ask price of a security ...
  4. Fixed-For-Floating Swap

    An advantageous arrangement between two parties (counterparties), ...
  5. Interbank Rate

    The rate of interest charged on short-term loans made between ...
  6. Interest Rate Swap

    An agreement between two parties (known as counterparties) where ...
Related Articles
  1. What is the difference between LIBOR, ...
    Options & Futures

    What is the difference between LIBOR, ...

  2. How Interest Rate Cuts Affect Consumers
    Credit & Loans

    How Interest Rate Cuts Affect Consumers

  3. An Introduction To LIBOR
    Options & Futures

    An Introduction To LIBOR

  4. ISDA Master Agreement
    Investing Basics

    ISDA Master Agreement

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center