Have a fairly intricate model with plenty of moving parts already. Set a senior and subordinate loan to calculate as LTCs of a total capitalization which inherently accounts for their interest reserves.
The model calculates well enough when I set iterations to i.e. 200 - but is there are way to make it operate faster without changing the iteration count?
would like to hear some opinions
Interested as well
don't run iterative calculations, but instead include a buffer in the rate. Iterative calcs are cumbersome and provide a sense of false accuracy.
Can't the same be said about static calcs? If the loan sizing for one of the debt tranches becomes static, it won't gauge the interest properly.
Can you give an example of the buffer?
In other words, run the model/waterfall one step forward i.e. calculate the interest off of the prior periods balance. Regarding the buffer, run a market rate + 50bps
Can you post the (abbreviated) spreadsheet?
Bump. would be interested in this too. I delay the calcs one period or start with BOP balance and i still usually need 200 iterations to to accommodate mezz construction. Heck just a construction whole loan I usually need iterative calcs
it works fine at 200 (max 2 refreshes) just annoying when you have a lot to crunch
ahhh, my apologies, forgot to mention my our model has a facility size and expected loan-to-cost...nevermind
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