When SOFR moves, your DSCR moves with it. The question is not whether to hedge. It is how much protection to buy without overpaying. Most teams still stitch this together in Excel under time pressure. They rebuild forward curve assumptions, a few strike options, and a covenant test every time. Asset Management ~10 min to run Analyze Interest Rate Cap on Floating-Rate Loan Vic prompt Use Vic to analyze the interest rate cap on the floating-rate loan for the asset using the current SOFR curve and DSCR covenant. Purpose Keeps the loan in covenant while minimizing hedge expense. The same analysis that takes an analyst two hours completes in about ten minutes. Inputs Floating Loan Terms Required Property Noi Optional Existing Hedge Optional Hold Horizon Optional Strike Candidates Optional Output Format Optional Outputs An Excel file or memo with debt-service tables, strike-selection grid, cap mark-to-market, replacement budget, and instrument recommendation. Time saved Turns roughly two hours of manual work into about ten minutes. How it works You give Vic the loan terms and, if you have them, current NOI, any existing hedge, your hold horizon, and a set of strike candidates. If you do not provide strikes, Vic runs a grid across reasonable options. The analysis uses the current SOFR forward curve to project period by period debt service and DSCR for three paths: uncapped, capped, and swapped. The run line is simple: "Use Vic to analyze the interest rate cap on the floating-rate loan for the asset using the current SOFR curve and DSCR covenant." The output comes back as an Excel file or a clean memo. You get debt service tables by period for each scenario, so you can see where pressure shows up instead of a single summary number. A strike selection grid pairs premium cost with defended DSCR and shows which strikes keep the loan inside the covenant and how much headroom each option provides. If there is an existing cap, Vic marks it to market and estimates the replacement budget against reserves. This matters in practice. Teams often look at a new cap in isolation and miss the carry and timing of replacing what is already in place. The recommendation is direct. Cap versus swap is compared on cost and DSCR headroom to the covenant. You see which option clears the test with the least spend, not just which one produces the highest DSCR on paper. A few practical notes. The grid is where the decision gets made. It ties premium dollars to covenant protection in a way you can defend internally. The period view catches problems that an average rate will miss, especially if NOI has seasonality. Keeping the uncapped case next to the hedged cases keeps everyone honest about the risk you are paying to remove. This is routine work, but it is rarely clean. The task standardizes the mechanics and shortens the cycle. Instead of rebuilding a model and arguing about inputs, you can focus on whether the selected strike is worth the premium and how much cushion to carry against the covenant.