Interest Rate Derivatives – Brian Spear

CED Capital Holdings

Compliance takes up more and more time on our side…Know Your Customer, the Patriot Act, Dodd-Frank and everything…they take up time and take up money…so we try to streamline it and Chris is a key to streamlining the derivatives side. He’s been able to remove that hassle from my to do list and it’s a very big deal.

Brian Spear: EVP, CED Capital Holdings

We have tax exempt variable rate bonds that require us to put caps in place.
The stuff beyond that is informing our strategies when it comes to the direction of interest rates and where markets are going, what type of debt to put into place and executing more exotic derivative instruments that we’re interested in. Chris has done a great job, and is very prompt to respond. Chris and I go way back. I don’t have to worry about him being salesy to me. He is truly more of a consulting type of guy. When it’s time to do a transaction we do it through him. We need derivatives, it’s just the nature of our business. He’s very good with advice. He’s exactly what we need for our business and to deal with my neuroses.

Chris has been around for awhile and his group, Derivative Logic, I’m sure they’re bouncing ideas off of each other all the time. Chris is advanced well beyond where I am and he also has his finger on the pulse of the market. We just discussed using a cash settled swaption instrument to hedge against interest rates. This is a good fit for what we’re trying to do. I want to hedge against interest rate risk in the near term, so when we execute our debt we will be at a good level. Chris pointed me in the right direction. It’s the right product for what we’re wanting to do and we’ll probably get that one done.

Compliance takes up more and more time on our side. But, again, Chris is the lead blocker and he works with my analysts and he’s made it as efficient as he can. Compliance is something we have to deal with everywhere. Every piece of real estate that we own has a partnership. We have new partners that are sometimes internal, sometimes external, but there are partnerships all over the place. Know Your Customer, the Patriot Act, Dodd-Frank, it’s something that trips us up a little bit but we try to find systems that make it smooth. They take up time and take up money. So we try to streamline them and Chris is a key to streamlining the derivatives side. He’s been able to remove that hassle from my to do list and it’s a very big deal.

Brian Spear: EVP, CED Capital Holdings

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