Swap Spread

DEFINITION of 'Swap Spread'

1. The difference between the negotiated and fixed rate of a swap. The spread is determined by characteristics of market supply and creditor worthiness.

2. The difference between the swap rate and the lending rate offered through other investment vehicles with comparable characteristics.

BREAKING DOWN 'Swap Spread'

Similar to equity spreads, the swap spread adjusts for every contract and the different participating parties.

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