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...

Leading commercial real estate investors realize that minimizing risk and maximizing returns requires accurate, proactive management of their debt. They combine CRE-specific debt technology and industry-leading support for implementation/maintenance with advice on best practices.

An FX forward curve is a curve that shows FX forward pricing for all the different dates in the future. FX forward pricing is determined by the current exchange rate, the interest rate differentials between the two currencies, and the length of the FX forward.

These frequently asked questions address some of the common issues that commercial real estate borrowers face when considering an interest rate swap. These include swap rates and mechanics, prepayment/breakage, and documentation.

An interest rate forward curve for a market index (like SOFR) is, at a discrete moment in time, a graphical representation of the market clearing forward rates for that index.