Yield maintenance is a prepayment structure commonly used with fixed-rate commercial loans, paying lenders a present value for unpaid interest if the loan is paid off early. Simply put, this is a present value of remaining interest payments, based on the difference between the loan’s rate and a benchmark (e.g., Treasury yield) for the remaining term. This is typical for agency, bank, Life Co, or CMBS loans.

The Term SOFR forward curves reflect market expectations for future 1-month and 3-month Term SOFR rates, widely used in floating-rate commercial real estate loans. Treasury forward curves show anticipated yields for U.S. Treasury notes across various maturities. Both are derived from observable data like futures, swap rates, and existing Treasury securities. These forward looking curves can aid in forecasting and underwriting fixed- and floating-rate debt but aren’t definitive predictors of future rates.