DEFINITION of 'Zero Basis Risk Swap - ZEBRA'
A swap agreement between a municipality and a financial intermediary.
Also known as a "perfect swap" or "actual rate swap".
BREAKING DOWN 'Zero Basis Risk Swap - ZEBRA'
The municipality pays a fixed rate of interest to the financial intermediary and receives a floating rate of interest in return. The floating rate received is equal to the floating rate on the outstanding floating rate debt initially issued by the municipality to the public.