Swap Documentation in Real Estate Loan Transactions: Coordinating ISDA Master Agreement and Loan Agreement Terms

Documenting Covenants, Security, Required Consents, Voting and Control, Reporting, and Regulatory Issues

Recording of a 90-minute CLE webinar with Q&A


Conducted on Thursday, December 14, 2017

Recorded event now available

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Program Materials

This CLE webinar will discuss the various uses of swaps and other derivative products to hedge risk in real estate finance transactions, how derivatives are integrated into loan documentation, and how to document the swap transaction to ensure there is consistency with the loan. The program will also address the consequences of falling and negative interest rates on real estate borrower, lender and swap market participants.

Description

Swaps and other derivatives are commonly used by borrowers and lenders to hedge against movement in market interest rates. The ISDA form Master Agreement, the Schedule thereto and a Confirmation together establish the relationship between borrower and swap provider and the economic terms of the hedging transaction.

Loan terms and swap documentation mismatches adversely affect the credit transaction, servicing and enforcement. Counsel to lenders and borrowers must ensure that loan documents sufficiently reflect the hedging transaction.

Counsel to swap parties must understand the financial ramifications and regulatory framework of interest rate hedges to advise clients considering hedge transactions.

Listen as our authoritative panel of finance practitioners guides you through the use of swaps to hedge risk in real estate loan transactions and best practices for documenting both the swap transaction and the terms of the swap transaction in the loan documentation. The panel will also look at the impact of rising and falling rates on real estate borrowers, lenders and swap market participants.

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Outline

  1. Use of derivatives to hedge risk in real estate loan transactions
    1. Rate caps
    2. Interest rate swaps
  2. Impact of fluctuating interest rates
  3. Integration of derivatives into loan documentation and coordination with derivative documentation
    1. Counterparty risk
    2. Security for hedge obligations
    3. Definite obligation
    4. Mortgage tax
    5. Regulatory matters

Benefits

The panel will review these and other key issues:

  • Current market trends for use of derivatives to hedge risk in real estate loan transactions
  • Best practices for integrating derivatives into loan documentation
  • Best practices for coordinating loan documentation with derivative documentation

Faculty

Koppele, Jeffrey
Jeffrey H. Koppele
Partner
Ashurst

Mr. Koppele provides advice on both tax and derivatives matters in a wide variety of financial...  |  Read More

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