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A Henry Stewart Market Briefing

Borrowing Strategies
For 2004

Generating real returns in a world of rising interest rates

The Bank of England signalled a turning point on 6th November 2003, with the first upward movement in base rates since February 2000. The money markets reached the same conclusion some three months earlier, with 5-year swap rates escalating from 3.75% in June, to 5.25% in November. So what happens next, what is likely to happen later and what, as a consequence, should you do now?

This briefing will examine the forces at work, forecast where interest rates are likely to peak and the timescale over which events will unfold. Multiple strategies designed to generate real returns against the background of rising rates, static yields and falling rental values will be analysed. In particular:

  • How will lenders react to a higher interest rate market?
  • Recognising the first signs of borrower stress and predicting lenders’ reactions
  • Is it currently better to float or fix? When to switch
  • What are the new developments in the mortgage market, and what new products are available?
  • Is it time to act on expensive break costs?
  • How to tap the private investor – a source of cheap equity
  • Coping with the rising tax take and its implications for liquidity
  • Sourcing senior debt. Who the most competitive lenders are
  • Handling credit risk
  • Which markets offer the best opportunities?

Detailed presentations on:

  • The global economy and its influence on UK real estate lending
  • The UK senior debt lending market
  • The property finance markets – a lender’s perspective
  • Mezzanine and quasi equity
  • Equity
  • Hedging strategy and the use of derivatives
  • Taxation: what changes are taking place and how do they impact on your borrowing strategy?
  • Property companies – a borrower’s perspective

This briefing provides a comprehensive review of the salient issues facing borrowers and lenders who participate in the UK real estate market. Essential for all investors, advisers, bankers and financiers as well as lawyers and agents.

Full documentation will be provided to all delegates and adequate time set aside for questions.

Wednesday, 25 February 2004
The Berners Hotel, London W1