# Total return swap, TRS (also referred to in German as Ertragstausch and Performance-Swap)

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- Post ID: 592817
- Modified: 2023-07-25T21:13:23+00:00
- Language: en

## Definition

In general, the exchange of current income flowing from an asset - usually a security - for payments based on a contractually agreed reference rate (payment of all cash flows generated by the asset in exchange for payments based on a reference rate such as EURIBOR). - A special type of credit derivative that covers the entire economic risk of a credit relationship. - The protection buyer (floating rate payer) periodically exchanges with the protection seller (fixed rate payer) the income from a reference asset and its increase in value in return for payment of a variable interest rate that is mainly dependent on the credit rating of the reference asset. - The fixed rate payer assumes not only the credit risk of the reference asset but also its market price risk. - As a rule, the counterparties in this transaction are located in different countries or currency areas. - See credit derivative, credit event, option, sleepy warrant. - Cf. Deutsche Bundesbank Monthly Report, April 2004, p. 30 (overview of standard contractual relationships). Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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