Nom de Plumber is a Nom de Plume
“……..The firms say they use interest-rate swaps to hedge against rate swings and have raised more than $30 billion in equity over the past two years…..”
The REIT managers are essentially confident that their interest-rate hedges will also help cover credit-spread, prepayment, basis, regulatory, and liquidity risks.
Perhaps, they may be overconfident. Just look at what happened to Fannie and Freddie.