Changes in Interest Rate; Applicable Margin Clause Samples
The "Changes in Interest Rate; Applicable Margin" clause defines how and when the interest rate or the margin applied to a loan or credit facility may be adjusted during the term of the agreement. Typically, this clause outlines the circumstances under which the lender can increase or decrease the interest rate, such as changes in a reference rate (like LIBOR or SOFR) or shifts in the borrower's credit profile, and specifies the process for notifying the borrower of such changes. Its core practical function is to provide a transparent mechanism for adjusting borrowing costs in response to market or credit conditions, thereby allocating risk and ensuring both parties understand how interest expenses may fluctuate over time.
Changes in Interest Rate; Applicable Margin. Each CB Floating Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is automatically converted from a Eurodollar Advance into a CB Floating Rate Advance pursuant to Section 2.9, to but excluding the date it is paid or is converted into a Eurodollar Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the CB Floating Rate for such day plus the Applicable Margin. Changes in the rate of interest on that portion of any Advance maintained as a CB Floating Rate Advance will take effect simultaneously with each change in the Prime Rate. Each Eurodollar Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at a rate equal to the Adjusted LIBO Rate (plus the Applicable Margin) determined by the Agent as applicable to such Eurodollar Advance based upon the Borrower’s selections under Sections 2.8 and 2.9 and otherwise in accordance with the terms hereof. No Interest Period may end after the Maturity Date.
Changes in Interest Rate; Applicable Margin. Each CB Floating Rate Advance shall bear interest on the outstanding principal amount thereof, for each day from and including the date such Advance is made or is automatically converted from a EurodollarSOFR Advance into a CB Floating Rate Advance pursuant to Section 2.9, to but excluding the date it is paid or is converted into a EurodollarSOFR Advance pursuant to Section 2.9 hereof, at a rate per annum equal to the CB Floating Rate for such day plus the Applicable Margin. Changes in the rate of interest on that portion of any Advance maintained as a CB Floating Rate Advance will take effect simultaneously with each change in the Prime Rate. Each EurodollarSOFR Advance shall bear interest on the outstanding principal amount thereof from and including the first day of the Interest Period applicable thereto to (but not including) the last day of such Interest Period at a rate equal to the Adjusted LIBO RateTerm SOFR (plus the Applicable Margin) determined by the Agent as applicable to such EurodollarSOFR Advance based upon the Borrower’s selections under Sections 2.8 and 2.9 and otherwise in accordance with the terms hereof. No Interest Period may end after the Maturity Date.