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UK real estate JV: Libor discontinuation and hedging
Case studies

UK real estate JV: Libor discontinuation and hedging

Background

A UK real estate joint-venture refinanced its bank debt through a new banking syndicate of three lenders

JCRA was appointed as the independent hedging advisor in order to achieve the following outcomes:

  • Advise on a hedging strategy that meets the objectives of the company and supporting business plan
  • Advise on the consequences following the discontinuation of Libor
  • Run the hedge-execution process to ensure transparent and competitive pricing
Our Approach
  • After discussing the business plan with the company, we determined the key objectives and advised on the mostsuitable hedging strategy
  • We helped to identify and quantify the potential risks that the client could face following the discontinuation of Libor
  • We supported the company’s legal team in defining the most appropriate
    commercially sensible “Libor replacement” language in the firm’s existing financing and derivative documentation
  • Implemented the most suitable hedging strategy
Benefits
  • Clear audit trail of decision making and rationale for the hedging choice, provided in a post-trade deal summary
  • “Libor replacement”language in line with the most recent industry guidelines and market developments
  • Transparent and competitive pricing at execution and substantial cost savings for the client
 

More case studies

Case studies
UK REIT: Pre-hedging loan breakage costs
Real Estate October 2019
Case studies
Castle Marinas: Hedging a refinance
Real Estate July 2019

Contact us

If you need hedging or debt advice or would like to speak to the team, please get in touch.