Menu
Home
People
Places
Arts
History
Plants & Animals
Science
Life & Culture
Technology
Reference.org
Quality spread differential
open-in-new
<p>Quality spread differential (QSD) arises during an <a href="/facts/Interest_rate_swap/cJyud3Jn">interest rate swap</a> in which two parties of different levels of <a href="/facts/Creditworthiness/6jbaLoAR">creditworthiness</a> experience different levels of interest rates of debt obligations. A positive QSD means that a <a href="/facts/Swap_(finance)/koSzDf30">swap</a> is in the interest of both parties. A QSD is the difference between the default-risk premium differential on the fixed- rate debt and the default-risk premium differential on the floating-rate debt. In general, the former is greater than the latter. </p>