Interest Rate Case Study
Interest Rate Case Study
An Australian fund manager was launching a new AU$1bn property fund with 60% leverage. As a condition on the financing, 50% of the debt must be hedged.
Rochford was engaged to:
- Analyse and quantify the risks involved
- Analyse the swap curve and align hedging strategy with fund objectives
- Evaluate the hedging solutions available for example swaps and options
- Manage counterparty negotiations covering pricing, structure, documentation and execution.
Outcomes:
- The swaps were executed on significantly more favourable commercial terms than would have otherwise been achieved
- The swap execution was phased overtime to minimise the neat term impact on distributions/cash flow.