GP/LPs - Would you buy a rate cap now?
Sponsors/LPs: For a new deal now, would you buy a rate cap on your debt? Why and why not? I feel like rates are so going to be low for the foreseeable future, due to QEs and Central Banks easing.
Yes, I'd still buy one if I was in that position. Because of what you mention, they're incredible cheap, so why not be prudent for such a low cost? It's like buying an insurance policy for anything -- you begrudgingly pay the premium but thank God if/when it helps you.
Also if you’re doing any leveraged deals, you’re going to have to buy one anyway. The lender will require it.
Would there be any reason to buy one if you weren't doing leveraged deals?
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