CMS Sept 2022

Internal Use Only

Interest Rate Swaps

An agreement between two parties where a series of fixed rate payments are exchanged for a series of floating rate payments over an agreed upon term.

Fixed Interest Payment

Pay Fixed Counterparty

Receive Fixed Counterparty

Floating Interest Payment

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Internal Use Only

Primary Uses for IRR Swaps

Balance Sheet Hedging • Manage IRR • Goal is to protect NIM • Limit the upside but protect against the downside

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