, however, counterparty exposure is expected to accrue over the l ife of the swap until it is discharged with the payment of the fee at termination of the contract. MVA delays counterparty risk and this can reduce bid-offer spreads. <span>The present value of the payme nt made to bring the bond to par is also smaller because it occurs in the future. This means that the swap does not need to be as far off par as in the par/par methodolog y a nd the problems caused by collateralisation of a large loan are red uced. The MVA methodology is, however, much less common than the par/par asset swap for government bonds. A summary of the cash flows involved in an MVA asset swap using the same bond as
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