In another lifetime, I worked at The Bank That Shall Not Be Named (but here’s a hint, it rhymes with Machovia). Our swap desk was divided between Investment Bank and General Bank.
Investment bank clients were the biggies and had access to capital markets, so they didn’t close on loans the way most of us do. They would frequently issue fixed rate bonds. Our swap desk that covered these clients spent the majority of their time pitching a swap from fixed back to floating. Many of you may be unfamiliar with swaps back to floating, but the mechanics are the same. The difference is that client pays floating. Click here to continue reading….