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ARTICLE · 13 FEBRUARY 2017

Using A Preferred Mortgage Structure For Cash Out Refinancings

A&O Shearman
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Fairly recently, our group closed the refinancing of a multibillion dollar single asset mortgage loan which included the advance of new additional dollars.

United StatesFinance and Banking
A&O Shearman
A&O Shearman
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Fairly recently, our group closed the refinancing of a multibillion dollar single asset mortgage loan which included the advance of new additional dollars. A portion of the proceeds were used to defease an existing securitized loan (defeasing that loan was a transaction unto itself). The rate for the new facility was a historically low rate for a 10- year fixed rate loan.

Since the transaction was relatively highprofile in our industry, for the purposes of this piece, I will use some hypothetical figures to drive home the point of the magnitude of costs that can be saved with the loan structure discussed in this article - let us assume for this purpose that the new mortgage loan was in the amount of $1 billion and that the "old money" mortgage that was defeased was $600 million.

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