Interest Rate Swap Fees

Hey Guys,

So I work on the debt side in the RE industry. I wanted to ask about interest rate swap fees. I was assigned to be the point man in understanding the structure and valuation of all of our interest rate swaps for our clients. I am asking if any of you had a firm understanding in regards to the fees and spreads that go into these interest rate loan swaps.

To get the "All-In" rate we currently use the - Mid Market swap rate - Dealer fee - (Bank Name) financial fee - Bank Swap fee - Loan Spread

Then it totals to the "All-in" Rate.

Questions:

  1. What are typical dealer fees for CRE loans in sizes of $1 - $10 MM??
  2. Is the Bank fee for the cost of finding a 3rd party to take the other side of our swap agreement?
  3. For the bank swap fee why is this so high?
  4. Any help you could share with finding what the current spreads are in the market so that I can fact check the quotes when received?

The main reason I am asking is because I just want to make sure if given an all in quote breakdown, that my firm and our clients aren't paying high fees. Any help and guidance would be much appreciated!

Thanks everyone.

1 Comments
 

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