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#asset-swap #finance #gale-using-and-tradning-asset-swaps
For an investor, a par/par asset-swapped bond is like a floating rate bond, whose only net cash flows are the floating receipts, which are based on a constant spread to Libor.
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owner: piotr.wasik - Using and Trading Asset Swaps - Giles Gale (Morgan Stanley), p5

g or flattening in both curves may therefore lead to a mechani cal widening or tightening of the yield spread In this example, a steeper curve shou ld imply a wider yield/yiel d swap spread for a high coupon bond. Par/Par Asset Swaps <span>For an investor, a par/par asset-swapped bond is like a floating rate bond, whose onl y net cash flows are the floating receipts, which are based on a constant spread to Li bor. This spread reflects fact ors affecting the price of the bond outside of duration. The par/par metho dology therefore allows an investo r to be exposed only to the idiosy ncrasies



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