FRI - REITs Are Switching To Swap Futures To Free Up Cash
2024-07-27 04:20:00 ET
Summary
- REIT industry may shift to Eris SOFR swap futures for hedging efficiency, potentially saving top REITs $1.5 billion in posted margin.
- Recent events show growing interest in Eris SOFR markets, with potential for significant margin savings for REITs.
- By replacing SOFR-based swaps with Eris SOFR Swap futures, top Residential Mortgage REITs could save $1.5 billion in posted margin annually.
By Eric Leininger and Michael Riddle
At a Glance
- Recent events suggest the potential for a structural shift in the REIT industry in hedging efficiency as the Eris SOFR markets are demonstrating readiness for more widespread use.
- By our estimate, top REITs could save $1.5 billion in posted margin by switching to Eris SOFR swap futures.