Swaps are perhaps the most commonly used hedging instruments offered by banks. Swaps are separate contracts from the loan and allow borrowers to customize their hedging strategy outside the scope of the financing. In general, swaps are most commonly used for long term financings.
We work with our clients to identify the appropriate structure after factoring in the various benefits, risks, and considerations of each scenario. We want to understand plans for the underlying asset, risk tolerance, cash flow concerns, and prepayment sensitivity prior to developing a risk management strategy.
Pensford is not a broker – we are not looking to direct business away from the lender. We provide objective advice on interest rate strategies to maximize project returns.