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Indexed Principal Swap (IPS)
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An amortizing fixed-for-floating rate swap with a fixed rate above the market rate for a constant notional principal swap, and an amortization rate that decreases as rates rise and increases as rates fall. The most common variety is a mortgage replication swap. Also called LIBOR Indexed Principal Swap (LIPS). Compare with Index Amortizing Swap. See Amortizing Swap. See also Index Allocated Principal (XAC) Bond, Mortgage Replication Swap.
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