Derivatives · glossary
A swap left running after the loan it hedged has been repaid. Atlas's swap became one in November 2028. Its payments no longer offset any loan interest, so it was a bet on rates, not a hedge. Hedge Sheet 7 · Chapter 11
Explained in Chapter 11, The Refinancing, Termination Events and the Orphaned Swap, of Derivatives.
In November 2028 Atlas repaid its loan early, with money from a new bank. The swap that hedged the loan did not end. It is a separate contract with Pellhaven, and under it Atlas pays a fixed 3% until July 2031. A swap left running after its loan has gone is an orphaned swap.Read Chapter 11, The Refinancing, Termination Events and the Orphaned Swap →
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