The Prepayment Decision: Strategies for Analyzing and Executing Debt Prepayments

Wednesday, December 11, 2013 | Recording Available

There are a number of reasons real estate investors consider prepaying their debt: extending debt maturities, acquiring additional proceeds, and lowering coupon rates. In addition to analyzing whether one should prepay debt, one must consider other alternatives to prepayment such as using derivatives and forward lending commitments. Any prepayment solution or prepayment alternatives involve market risk; this webinar is designed to help prudent investors better measure their market risk and portfolio exposures.


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In this webinar, we will discuss key variables that impact the decision to defease and refinance. We will compare this approach to the other risk management strategies, focusing on key details that can be the difference between successfully mitigating risk and unintentionally increasing volatility. We will also discuss practical considerations related to rate locks and walk through case studies noting common pitfalls.

 

Learning Objectives:
– Review and understand variables impacting the decision to defease debt and refinance prior to maturity
– Comprehend the advantages and disadvantages of defeasing and refinancing compared to other common risk management strategies such as forward starting swaps, swaptions, and forward commitments
– Gain understanding of common issues and unintentional risks that can accompany these strategies
– Attain a working knowledge of lender Rate Lock Agreements

 

Speakers:
Matt Henry is the Head of Chatham’s Global Real Estate team, which provides a broad spectrum of capital markets solutions to the commercial real estate industry. Since joining Chatham in 2004, Matt has represented clients in over $15 billion of capital raising and restructuring engagements. Matt’s capital raising expertise includes equity, preferred equity, mezzanine debt, first mortgage construction and permanent debt, lines of credit, and DIP loans. He has represented clients in the acquisition of distressed real estate securities, in lender workouts, as a financial advisor in Chapter 11, and as an expert witness. Matt came to Chatham Financial from Majestic Capital Management, LLC, a hedge fund. Matt holds a BA in Business and Economics from Wheaton College and an MBA from the University of Michigan.

 

Evan Marble is a member of Chatham’s Hedge Advisory Team predominately focused on serving the real estate industry. In this role, Evan provides interest rate and foreign currency hedging expertise along with practical guidance on areas such as ISDA negotiation and Dodd-Frank compliance to Real Estate Investment Trusts (REITs) and other publically traded real estate companies. Evan is a contributing author to Chatham’s weekly newsletter offering content and commentary on everything from Bitcoins, derivatives regulation and the LIBOR scandal. Prior to joining Chatham, Evan attended the University of Pittsburgh. He holds a BS in Economics and a BA in History and Political Science.