he recovery value of the bond. But the buyer must continue to pay on the s wap, although he/she may choose to close it out at market value. Funding and Collateral The execution of a par/par tra de also involves some complications. <span>The most important of these, in our view, is that the large upfront payment leads to the questio n of the correct funding charge to apply. Because the swap and the sale of the bo nd are not independent transactions, to model the spre ad fairly, we need to u
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