2013-02-27 19:33:48 - Commercial borrowers are informed of a simple way to save hundreds of thousands of dollars
Swap Negotiators, an advocate for commercial borrowers, recently attended The Commercial Real Estate Financing 2013 seminar in New York which explored major issues, problems and recent changes in how lenders and borrowers negotiate commercial real estate loans in the lingering shadow of the recent financial crisis.
The two-day seminar provided an overview of many topics of interest and importance to commercial real estate attorneys, executives, in-house counsel, asset managers and acquisition managers.
“One subject, in particular, was mentioned in the published materials attendees received, but not fully covered during the conference due to time constraints,” said Andy Johnson, an Associate with Swap Negotiators. “We felt it was important to further expand on the topic of hidden interest rate swap
fees and we are in the process of educating seminar attendees and others about this topic.”
Interest rate swaps are commonly used when executing commercial real estate loans. Swaps are an effective way to hedge against the interest rate risk associated with floating rate debt; it allows the borrower to replace the floating rate index in their loan with a known fixed rate. This is a great way to manage risk and obtain predictable cash flows.
“The swap provider (usually the bank) will add a mark-up in basis points to the fixed rate. This mark-up can equate to hundreds of thousands of dollars over the life of the loan. What's more important to know is that this charge is undisclosed, often excessive, and can be negotiated. This is where Swap Negotiators comes in,” Johnson stated.
Swap Negotiators acts as an intermediary between borrowers and their banks on all types of swap transactions (executing, modifying, unwinding and assigning). An important part of their team consists of former bankers that worked on the derivatives side of the bank and, because of this, they are able to create transparency and bring expertise to ALL borrowers when considering strategies and executing interest rate hedges.
“While banks are due a fee when booking a swap to cover the element of risk, the borrower should be represented so that he may competently negotiate a reasonable price. This can only be done when a borrower has access to live market data, which ensures that the contract is concluded in accordance with negotiation,” added Johnson. “With our help, other commercial borrowers have saved hundreds of thousands of dollars.”
About Swap Negotiators
Located in Central Florida, Swap Negotiators provides advocacy, expertise, and advice on interest rate swap contracts for commercial borrowers and works in partnership with banks to provide transparent pricing, valuations and ongoing support for the life of a swap. Additional information about Swap Negotiators can be obtained by calling (877) 218-8016 or by visiting www.swapnegotiators.com.
Phone: (407) 264-7264