Municipal issuers don't make a habit of it, but a few have tried their hand at the currency swap. In a currency swap, one of the most common outside the municipal market, a party and counterparty each agree to make periodic interest payments, with each using a different currency.

Unlike most interest rate swaps, one side does not necessarily have to pay interest at a fixed rate and the other at a floating rate. And while the interest payments are based on a principal amount, a trait shared with other swaps, the principal amount may be exchanged at the outset and again at maturity.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.