DEFINITION of 'Zero Coupon Swap'
An exchange of income streams in which the stream of floating interestrate payments is made periodically, as it would be in a plain vanilla swap, but the stream of fixedrate payments is made as one lumpsum payment when the swap reaches maturity instead of periodically over the life of the swap. The amount of the fixedrate payment is based on the swap's zero coupon rate.
INVESTOPEDIA EXPLAINS 'Zero Coupon Swap'
Variations of the zero coupon swap exist to meet different investment needs. A reverse zerocoupon swap pays the lumpsum payment when the contract is initiated, reducing credit risk for the payfloating party. An exchangeable zerocoupon swap can use an embedded option to turn the lumpsum payment into a series of payments. It is also possible for the floatingrate payments to be paid as a lump sum in a zerocoupon swap.

Reverse Swap
An exchange of cash flow streams that undoes the effects of an ... 
Debt For Bond Swap
A debt swap involving the exchange of a new bond issue for similar ... 
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An agreement between two parties (known as counterparties) where ... 
Forward Swap
A swap agreement created through the synthesis of two swaps differing ... 
Currency Swap
A swap that involves the exchange of principal and interest in ... 
Credit Default Swap  CDS
A swap designed to transfer the credit exposure of fixed income ...

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