📊 Definition
Maturity / Refinance Risk Exposure measures the amount and timing of debt maturities across a portfolio. It shows refinancing risk concentration—how much debt must be refinanced within specific timeframes.
The Formula
Expressed as percentage of total debt
Example Calculation
A portfolio with $150M total debt:
Next 24 Months: $70M = 46.7% exposure
Where Does the Data Come From?
Track maturity risk from loan documents:
- Maturity Dates: From loan agreements for each property
- Loan Balances: Current outstanding balance at each maturity
- Extension Options: Whether loans can be extended (add 12-24 months)
- Prepayment Penalties: Cost to refinance before maturity
Create maturity schedule showing all loans by maturity date.
Who Uses This Metric?
CFOs & Treasury
Manage refinancing risk and plan financing strategy. Track alongside average interest rate to understand rate impact. If 40% of debt matures in 2025, start refinancing discussions 12-18 months early. Stagger maturities to avoid concentration risk.
Fund Managers
Assess portfolio risk and plan exit strategies. Heavy maturity concentration in 2024-2025 creates forced selling pressure if refinancing isn't available. Diversify maturity profile to reduce forced transactions.
Lenders & Rating Agencies
Evaluate borrower refinancing risk. Concentrated maturities increase default risk if credit markets tighten. Prefer borrowers with staggered maturities (no more than 25-30% maturing any single year).
Why This Metric Matters
1. Market Timing Risk
Concentrated maturities force refinancing regardless of market conditions, putting DSCR at risk. If 50% of debt matures in 2025 and rates spike, you must refi at high rates or sell. Staggered maturities provide flexibility to wait for better markets.
2. Liquidity Planning
Know when refinancing capacity is needed. Model refinance proceeds early. $70M maturing in 24 months requires lender relationships, updated financials, and appraisals ready 12+ months in advance. Prevents last-minute scrambles.
3. Value Realization Strategy
Plan dispositions around maturity dates. If value-add projects mature 2024-2025, consider selling instead of refinancing if markets are strong. Maturity date provides natural decision point.
💡 Pro Tip
Target no more than 25% of portfolio debt maturing in any single year. If concentration is higher, proactively refinance early (even with modest prepayment penalties) to spread maturities. The flexibility is worth the cost.
Frequently Asked Questions
What's an acceptable maturity concentration?
Best practice: <25% of debt maturing any single year. Acceptable: 25-35%. Concerning: 35-50%. Dangerous: >50%. High concentration forces refinancing at potentially unfavorable times. Spread maturities across 3-5 years minimum.
When should I start refinancing discussions?
12-18 months before maturity. Agency loans: 12-15 months. Bank loans: 9-12 months. CMBS: 12-18 months. Earlier for complex situations (value-add not fully stabilized, market uncertainty). Never wait until last 6 months—too risky.
Should I include extension options in maturity dates?
Track both: base maturity (without extensions) and fully extended maturity. Base maturity shows true refinancing deadline. Extended maturity shows maximum time available. Most extensions have conditions (performance triggers, fees)—don't assume they're automatic.
What if I can't refinance at maturity?
Options: (1) Request loan extension from lender (typically 6-12 months). (2) Sell property. (3) Bring in new equity partner for recapitalization. (4) Default (worst case—damages credit and future borrowing capacity). Plan ahead to avoid this scenario.
How do I reduce maturity concentration?
Refinance high-rate loans early (even with modest prepayment penalties) to spread maturities. When acquiring, favor long-term debt or staggered maturities. Use mix of 5, 7, and 10-year terms instead of all 5-year. Pay prepayment penalties if necessary to rebalance.
Manage Maturity Risk
BubbleGum BI tracks all loan maturities via our financial dashboard and alerts you to refinancing deadlines—helping you proactively manage refinancing risk across your portfolio.
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