constant maturity swap

CMS. A variation an interest rate swap in which the rate of one portion of the swap is fixed or set at a rate relative to LIBOR, while the other portion of the swap is reset periodically against the rate of a fixed maturity instrument, such as a Treasury. The duration of the swap is longer than the periods that the constant maturity is reset to, meaning that investors in a constant maturity swap are exposed to changes in the market over a longer period of time.

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