Derivatives · glossary
Replacing one party to a trade with a new one, with everyone's written consent. Moving the swap to Vantry was one way out in November 2028, but the new bank would have charged Atlas the swap's value through its rate. Clause 7.1 · Chapter 11 · Chapter 14
Explained in Chapter 11, The Refinancing, Termination Events and the Orphaned Swap, of Derivatives.
The main page for this term is Novation, in Finance Deals & Syndicated Lending.
Novation (replacing one party with everyone's consent) is real, but it does not avoid the cost. Pellhaven's side receives 3% in a market paying 1%, so it is worth money. Whoever steps in pays for it, then recovers the price through the rate it charges Atlas. The cost moves with the swap and does not vanish.Read Chapter 11, The Refinancing, Termination Events and the Orphaned Swap →
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