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Interest Rate Cap Counterparties for Multifamily Transactions (1/15/2021)
Below is a list of approved Interest Rate Cap providers (“Providers”) for Borrowers who are required to purchase an Interest Rate Cap for a Multifamily Mortgage Loan. The financial institutions listed below meet Fannie Mae's current ratings requirements for the issuance of Interest Rate Caps and all other criteria as determined by Fannie Mae:
- The Bank of New York Mellon;
- Commonwealth Bank of Australia;
- Royal Bank of Canada;
- SMBC Derivative Products Ltd. and SMBC Capital Markets, Inc.;
- US Bank National Association; and
- Wells Fargo Bank, N.A.
As of this date, Fannie Mae’s criteria require that the Provider must have a rating:
- from Standard & Poor’s, of at least:
- an A issuer or senior debt rating; or
- an A-1 short-term rating; and
- from Moody’s, of at least:
- an A2 issuer or senior debt rating; or
- a P-1 short-term rating.
Only the Providers on this list can be used to issue new interest rate caps or replacements for expiring interest rate hedge instruments. However, the exclusion of a provider included on a previous list does not indicate that Fannie Mae believes any existing interest rate hedge issued by that provider should be terminated and replaced. Fannie Mae will notify any Provider and its Lenders if Fannie Mae determines that a ratings downgrade or other adverse event for a given Provider necessitates a termination of an existing interest rate hedge.
This list of approved Providers is current as of the date above and will remain effective for any Provider until:
- publication of an updated list; or
- Fannie Mae notification that a Provider is no longer acceptable.
Fannie Mae does not intend this list to be an endorsement of any specific provider on this list. Fannie Mae is not liable for the current or future condition (financial or otherwise) or performance of any Provider, and any ratings downgrade or other adverse event for a given Provider may require a termination of existing interest rate hedges issued by that Provider. Interest rate caps, swaps and other business transacted with any Provider are entered into at the Borrower’s own risk and account.
If you have any questions, please contact Multifamily Product Management via email.