Interest Rate Hedges in Real Estate Finance: Placing Swaps, Caps, and Collars on Floating Rate Transactions
Pricing and Trade Confirmations, the ISDA Master Agreement, Counterparties, Current Regulation of Derivatives
Recording of a 90-minute premium CLE webinar with Q&A
This CLE course will describe hedging transactions and ways to limit the parties' exposure to changes in rates in floating-rate transactions. The panel will explain the role of the hedge counterparty and discuss critical aspects of hedge documentation.
Outline
- 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 LIBOR transition
- Impact of Dodd-Frank regulations: eligible contract participant qualifications
- Role of borrower's and lender's counsel
Benefits
The panel will review these and other relevant 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?
Faculty
Chrys A. Carey
Of Counsel
Morrison & Foerster
Mr. Carey represents clients in a wide variety of derivatives transactions and advises them on derivatives regulatory... | Read More
Mr. Carey represents clients in a wide variety of derivatives transactions and advises them on derivatives regulatory and compliance issues. His clients include investment companies, hedge funds, foreign and domestic banks, central banks, multilateral development banks and corporate end-users. Mr. Carey negotiates ISDA Master Agreements and other trading documents, including prime brokerage documents, clearing and execution agreements and related collateral arrangements. He also advises his clients on a broad array of derivatives regulatory issues arising under the Commodity Exchange Act and the rules and regulations of the Commodity Futures Trading Commission.
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Aaron S. Marines
Partner
Russell Krafft & Gruber
Mr. Marines has served 16 years in private practice, focused on real estate and business matters. Residential and... | Read More
Mr. Marines has served 16 years in private practice, focused on real estate and business matters. Residential and commercial developers rely on his years of experience working with zoning and land development, and the creation of condominiums, planned communities, and homeowners’ associations. His work includes complex projects such as mixed residential communities, mixed residential and commercial properties, leasehold condominiums and condominium conversions.
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