Commercial Loans | Mortgage Pipeline | Mortgage Servicing Rights | Bank & Credit Union Asset/Liability Management |
REIT's, Insurance & |
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Issue/Risk | Borrowers and lenders with commercial loans tied to SOFR may lose money as rates move |
Rate risk after mortgage commitment and prior to securitization |
Market value changes due to rate movement cause income statement volatility |
Variable rate funding may reprice, causing losses from mismatched duration |
Rate movements cause unrealized losses for bonds and other assets |
Solution | Hedge against rate movements using Eris SOFR, IRS, other futures |
Hedge risks using Eris SOFR, IRS, TBA MBS, Treasury Futures |
Hedge risks using Eris SOFR, IRS, TBA MBS, Treasury Futures |
Extend funding duration using Eris SOFR or IRS |
Manage portfolio duration using Eris SOFR, IRS, Treasury Futures, interest rate caps |
CME Group Article |
Eris SOFR for Private Lenders |
Eris SOFR for MSR |
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Advantages of using Eris SOFR |
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Futures contracts that replicate the cash flows and functionality of over-the-counter interest rate swaps, suitable for short-term trading or long-term hedging
The patented Eris Methodology allows for the creation of a listed futures contract that replicates the cash flows, convexity and functionality of traditional over-the-counter swaps.
As listed contracts, Eris Swap Futures are available to a wider user base as transparent financial instruments for easy trading and long term hedging purposes.
Eris Futures Price = 100 + A + B - C
Eris Innovations is an intellectual property licensing company that partners with CME Group and other global exchanges to develop futures and options products based on its patented product design, the Eris Methodology