Case Studies


  • Case Study #1

    Entering into a Swap

    Background
    A client was refinancing an $8 million bank loan on a commercial property. He had a new LIBOR-based loan proposal from his current bank, and he was also considering a fixed-rate loan through a CMBS program (commercial mortgage-backed security). The new loan proposal also offered him a …

  • Case Study #2

    Terminating a Swap

    Background
    A client came to us wanting to terminate a swap. They had executed a reverse swap (receiving a fixed-rate) to convert a fixed-rate private placement bond into a variable rate. The client was now paying off the bond and needed to terminate the swap. It had been several years since …

  • Case Study #3

    Designing a Hedge Program

    Background

    A client had just replaced their syndicated bank loan with a new loan having a lower LIBOR rate. The client had executed a swap on their previous loan, which was still outstanding. Unlike the loan it replaced, the new loan had a minimum LIBOR rate (floor), which made the client’s …

  • Case Study #4

    Hedge Accounting Solution

    Background

    A client was looking to hedge their new LIBOR-based loan with an interest rate swap. The unique aspect of the loan was that its interest payments were charged according to the monthly average of overnight-LIBOR plus a spread. The client wanted to make sure it received hedge accounting treatment on the …