Starting in March 2012, our CRE Loan Hedging working group sought to examine past and future market practices in loan hedging for CRE finance transactions in order to improve awareness of the issues and provide guidance to market participants. It was co-chaired by Mark Battistoni and Partha Pal.
In June 2013, the group launched CREFC Europe’s Guidelines for Interest Rate Hedging in European CRE Finance Transactions, covering the reasons for hedging, the ways it can be achieved, considerations to be taken into account and practical guidance for structuring transactions. The launch of the guidelines was supported by an educational seminar held in London and focusing on hedging fundamentals and hedging and senior debt funds.
While this group is not currently active, the broader subject remains topical.
More recently, the move away from the interbank offered rates (Libor and Euribor) that long underpinned floating-rate term financing markets raised significant transitional issues for the market. We were not closely involved in policy discussions, but we acted as an information resource and link for our members, organising various sessions on the subject and holding a meeting with Bank of England officials to discuss implications for real estate finance.
Please contact Peter Cosmetatos if you would like further information or have suggestions for further activities.