Resources
White papers, case studies, and hedging strategy guides for commercial real estate borrowers navigating interest rate risk, defeasance, and prepayments.
Fund Level Hedging: The Buy/Sell Swap
Most lenders that require a hedge can’t actually provide one. When borrowing floating from a debt fund, Agency, or other non-bank lender, if there’s a hedge, it’s almost always going to be a cap procured from a third party bank. What if you’d prefer a swap though?
Fund Level Hedging Series – Deferred Premium Caps
Institutional investors are increasingly looking for ways to be more thoughtful about how they protect their downside. Rather than treating every cap as a one-off expense at the asset level, many groups are rethinking how they hedge. One of the most overlooked (but valuable) opportunities is leveraging a fund level entity, whether for the benefit of a single asset or the entire fund.
Deferred Premium Caps
Given the constant chatter of potential hikes, many groups are reevaluating their positions and considering additional hedges. If you’re in that camp, a deferred premium cap is an alternative to consider, as it puts a ceiling on your rate without the need to call capital or use cash reserves.
Capped Corridors
Borrowers comparing term sheets often come across two options with similar terms – a balance sheet fixed rate and bank floater with a swap.
Declining Flat % Swaps
Borrowers comparing term sheets often come across two options with similar terms – a balance sheet fixed rate and bank floater with a swap.
Costless Protection With an Open Window
What an amazing report! Huge upside jobs gained and unemployment back down to 4.3%.
Cancellable Swaps 201
Now, let’s look at a less common structure – a cancellable swap where the borrower sells the right to terminate in the future.
Cancellable Swaps 101
Banks are back, rates are up, many hold periods are longer, and the volatility continues. A common topic of discussion when our clients are evaluating bank swaps is “What term should I go with?”
Fixed vs Floating Revisited
Swaps have some benefits that are often overlooked.