Hedging Series: “Interest Rate Cap” [Chapter 7]

June 19, 2018

By Jillian Mariutti, Director Debt & Equity Finance Team

Hedging Series: “Interest Rate Cap” [Chapter 7]

What is an interest rate cap? When you are commercial real estate borrower and you have floating rate exposure, a way to mitigate that risk is maybe not locking in fixed rate certainty but buying disaster protection; putting a ceiling on LIBOR. That is an interest rate cap. It is an option that’s paid for up front and you have a ceiling on LIBOR.

This is the seventh video — focusing on, “Interest Rate Swap” — in a series of eight episodes on the topic of Hedging presented by Jillian Mariutti.

 

Watch the previous chapters below:

CHAPTER 1

CHAPTER 2

CHAPTER 3

CHAPTER 4

Hedging Series: “Hedge Strategy And Structure” [Chapter 4] from Mission Capital on Vimeo.

CHAPTER 5

Hedging Series: “Interest Rate Swap” [Chapter 5] from Mission Capital on Vimeo.

CHAPTER 6