A financial institution should evaluate two options when competing for borrowers who need fixed-rate funding: providing a traditional fixed-rate loan or providing synthetically fixed-rate financing via a floating-rate loan and a pay-fixed swap. Review the six benefits to consider when evaluating the best solution to provide your borrower with long-term, fixed-rate financing.

Cross-currency swaps are becoming an increasingly common derivative within corporate debt capital structures. As organizations assess whether this product is befitting to their profiles, they consider a variety of questions — ranging from trade structuring to accounting treatment. In this...

Many financial institutions have experienced excess liquidity over the last few years as a result of the pandemic and associated fiscal stimulus. However, a more recent pick-up in loan demand is causing institutions to think more about future funding needs.

You may not have noticed, but your interest rate hedge may be worth quite a bit of money. As the Fed turns more hawkish in the face of inflation (which seems to be more than transitory), the forward curve for short-term rates has steepened significantly. The market is pricing in as many as seven...

An interest rate cap is essentially an insurance policy on a floating rate, most frequently SOFR. It has three primary economic terms: notional, term, and strike rate.

Movements in short-term rates like SOFR, used as indices for floating-rate financings, present a commonly understood source of interest rate risk for commercial real estate (CRE) borrowers. Movements in longer term interest rates can also create risk for borrowers. This guide examines the sources...

An interest rate swap is a financial contract in which two parties agree to exchange distinct cashflows for a given period of time. Commercial real estate (CRE) borrowers often encounter these swaps as a component of bank lenders’ fixed-rate financing offerings.

When deciding to prepay your fixed-rate CMBS debt, whether through yield maintenance or defeasance, most borrowers have questions. Chatham routinely supports the majority of principal balance, including the largest individual loans, defeased in a given year. View Chatham's list of yield...

Understanding the tactical steps involved in executing on an interest rate cap can help CRE investors plan and use their time efficiently prior to closing on a loan. Request your interest rate cap execution checklist here.

Debt valuation has long been a topic of debate among entities required to report fair value. Because of varied interpretations of accounting standards, methodologies for valuing debt have ranged from simply reporting the remaining principal balance to an application of complex algorithms. This...