It’s been a corporates’ market in leveraged debt for a few years now. Risk.net reports it is for swaps too. It is difficult to make money from vanilla flow trades, so swaps desks have turned to corporate swaps. These are priced by taking the market price and adding on margins for credit risk, funding and return on capital, which have almost halved over the past year, and the return on capital that banks price into swaps has sunk to <10bp on certain trades – ouch! It seems corporate swaps are seen as almost loss-leaders to get into the corporate to cross-sell ancillary business.