Walker & Dunlop revises terms on Landmark loan

摘要

Commercial real estate company WALKER & DUNLOP, the first borrower seeking to peg a US leveraged loan to the Secured Overnight Financing Rate, revised terms on its US$600m financing as it stands to set a new precedent for the benchmark. SOFR is not a perfect swap for Libor, so a credit spread adjustment is needed. JP Morgan, which is arranging the loan, is now offering three spread alternatives dependent on the chosen term option, according to a source. The bank, which is also arranging two additional SOFR leveraged loans, is walking a fine line as it seeks to set terms that balance an adjustment recommended by a Federal Reserve-backed group for legacy deals with the current rate environment. Walker & Dunlop has served as a test case for the US leveraged loan market that must move away from the maligned Libor this year, with many seeing an alternative in SOFR, the risk-free rate preferred by US regulators.