Breaking out swap curve + z-spread for a bond

Generally, a Z-spread calculation is straightforward: one has to project the cash flows of the bond and shift the swap curve up (in parallel) until the present value of the cash flows discounted with this shifted curve matches the observable (dirty) price of the bond.

It is to my knowledge that the swap curve is not the “par curve”, but rather a “zero coupon” (i.e. stripped curve). How is this “stripped swap curve” generally constructed? In simple terms hopefully.

In fact, the swap curve is analogous to the par curve: a single discount rate applied to all of the (fixed-rate) swap payments.

Yes, but I meant that for the sake of z-spread, generally the “par curve” (quoted by dealers) is not used, but instead the stripped one. I just wanted to understand the difference. Is the stripped one simply bootstrapping the spot rates?

I presume that it is.

When I was at PIMCO we used only the (US) Treasury curves, so I’ve never used a swap curve in practice to compute z-spreads or OASs, but it would have to be done analogously.