If a am the owner of a convertible mortgage note receivable, with interest of 8%, if mortgage interest rates in the market drop to 4.86%, what is the change in price? The FV is $70 million. The NOI is $6.8m. The last valuation of the mortgaged building was $65million. The cap rate is 10%. No market price is given but it is the year 2010. The mortgage was written in 1980. It is non-amortizing mortgage due on 12/31/2008. It is a 30 year mortgage.
Is there any way to calculate the change with that info? Who has the right to convert the loan, the receivable holder or the person who pays the receivable holder?
Please let me know if you need additonal information.