27.20 Uses of a TRS Total Return Swaps are usually used a financing vehicles Receiver wants to invest in bond Payer(a financial institution buys the bond and agrees to the swap Payer has less credit exposure than if it had lent Receiver money to buy bond Options, Futures, and other Derivatives, 5th edition 2002 by John C. HullOptions, Futures, and Other Derivatives, 5th edition © 2002 by John C. Hull 27.20 Uses of a TRS • Total Return Swaps are usually used a financing vehicles • Receiver wants to invest in bond • Payer (a financial institution) buys the bond and agrees to the swap • Payer has less credit exposure than if it had lent Receiver money to buy bond