AnAmortising swap[1] is usually aninterest rate swap in which thenotional principal for the interest payments declines (i.e. ispaid down) during the life of the swap, perhaps at a rate tied to the prepayment of a mortgage or to an interest rate benchmark such as theLondon Interbank Offered Rate (Libor). It is the opposite of theaccreting swap.If the swap allows for uncertaincontingent ups and downs in the notional principal, it is called a "roller-coaster swap".
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