Interest Rate Hedges in Real Estate Finance: Placing Swaps, Caps, and Collars on Floating Rate Loans
Understanding Pricing and Trade Confirmations, the ISDA Master Agreement, Counterparties, Current Regulation of Derivatives
Recording of a 90-minute CLE webinar with Q&A
This CLE webinar will describe hedging transactions and ways to limit the parties' exposure to changes in rates. The panel will describe the role of the hedge counterparty and discuss key aspects of hedge documentation.
- Overview of interest rate hedges
- Purpose—protection against changes in floating rate during loan term
- Caps, swaps and collars
- Pricing and auctions
- Role of counterparty
- Need for collateral
- Interest rate hedge documentation
- Hedge term sheet/bid sheet
- Recorded phone call during which trade is executed
- Trade ticket
- Hedge confirmation
- ISDA Master Agreement
- Schedule to Master Agreement
- Impact of Dodd Frank regulations—eligible contract participant qualifications
- Role of borrower’s and lender’s counsel
The panel will review these and other key issues:
- What kind of interest hedge is appropriate for your transaction?
- What are costs and risks associated with each type of hedge?
- How are hedge transactions bid out, executed, and documented?
- How are swap counterparties and cap providers currently regulated, and what are the qualification, clearing, and margin requirements for hedging transactions?
- What is the role of real estate counsel in the hedge transaction?
Jeffrey H. Koppele
Mr. Koppele provides advice on both tax and derivatives matters in a wide variety of financial... | Read More
Mr. Koppele provides advice on both tax and derivatives matters in a wide variety of financial transactions. He advises swap dealers, hedge funds and other market participants in a wide variety of derivatives transactions and structures. Mr. Koppele advises on multiple aspects of derivatives, including product structuring and new product development, documentation matters, closeouts and insolvency issues.Close
Lowndes Drosdick Doster Kantor & Reed
Mr. Heimendinger has worked on a variety of financing structures and instruments, with a particular focus on real... | Read More
Mr. Heimendinger has worked on a variety of financing structures and instruments, with a particular focus on real estate finance and structured finance. These include the representation of lenders, borrowers, and underwriters on a variety of transactions, including term and revolving credit facilities, public and private securitization transactions (including CMBS), mezzanine financing, equipment financing, currency and interest rate cap and swap transactions, underwriting agreements, intercreditor agreements, joint ventures, and jurisdiction-specific non-recourse structures. Within the real estate space, he has covered multiple asset classes, including hotels and leisure facilities, office towers, senior living facilities, and multi-family residential buildings. In addition to U.S. transactions, Mark has completed a number of cross-border transactions.Close