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Accreting Principal Swap (APS)
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In contrast to a traditional swap where the notional principal amount is fixed for the life of the swap and an amortizing swap where the notional principal declines as a mortgage or other loan is repaid, an accreting swap has a growing notional principal amount. Applications might include a situation in which a fixed rate payer had growing working capital requirements. Also called Accumulation Swap, Appreciating Swap, Construction Loan Swap, Drawdown Swap, Escalating Swap or Escalating Principal Swap, Staged Drawdown Swap, Step-Up Swap (2), Tailored Swap and, occasionally, Accrual Swap (2). See also Swap.
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Glossary *
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