Success Stories

Assignment to Obtain a Lower Fixed Rate

Combining Unwind And Assignments To Facilitate A Change In Lenders

The Situation
The borrower had been offered an improved loan spread from a competing bank that would lower its interest cost by nearly $500,000 over 5 years. However, it could not afford to unwind its swap and could not assign the swap because it had 16 years to run and the new bank could not accept swaps with more than a 10 year term. The new bank could not finance the swap unwind because of LTV restrictions.

The Solution
Swap Negotiators engineered an unwind of the last 6 years of the swap, thereby reducing the tenor to ten years, a term acceptable to the new bank. The payoff of the last 6 years was a small fraction of the entire unwind fee and easily affordable by the borrower.