Conversion to LIBOR Loan Clause Samples
The "Conversion to LIBOR Loan" clause allows a borrower or lender to change an existing loan from a different interest rate basis, such as a base rate or prime rate, to one that is calculated using the London Interbank Offered Rate (LIBOR). Typically, this process involves providing notice to the lender, specifying the amount to be converted and the desired interest period. This clause provides flexibility for borrowers to take advantage of potentially lower LIBOR rates or to align their loan terms with other financial arrangements, thereby managing interest rate risk and optimizing borrowing costs.
Conversion to LIBOR Loan. The Borrowers may elect from time to time, subject to Section 2.11, to convert any Outstanding Federal Funds Rate Loan or Alternate Base Rate Loan to a LIBOR Loan, provided that (a) the applicable Borrower shall give the Administrative Agent at least three (3) Business Days’ prior written notice of such election; and (b) no Federal Funds Rate Loan or Alternate Base Rate Loan may be converted into a LIBOR Loan when any Default has occurred and is continuing. Each notice of election of such conversion, and each acceptance by the applicable Borrower of such conversion, shall be deemed to be a representation and warranty by such Borrower that no Default has occurred and is continuing. The Administrative Agent shall notify the Banks promptly of any such notice. On the date on which such conversion is being made, each Bank shall take such action as is necessary to transfer its Commitment Percentage of such Loans to its LIBOR Lending Office. All or any part of Outstanding Federal Funds Rate Loans or Alternate Base Rate Loans may be converted into a LIBOR Loan as provided herein, provided that any partial conversion shall be in an aggregate principal amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof.
Conversion to LIBOR Loan. Borrower requests conversion of the outstanding Prime Loan to a LIBOR Loan.
2.1 Effective Date of Conversion: , 20
2.2 Principal Amount of Conversion: $ [minimum of $500,000.00]
2.3 Interest Period: month(s) [1, 2, 3, 6, 9 or 12 months only]
Conversion to LIBOR Loan. Borrower requests conversion of an outstanding Prime Loan to a Libor Loan.
2.1 Effective Date of Conversion: _________________, 19__
2.2 Principal Amount of Conversion: $ _______________[if LIBOR Loan, minimum advances of $ ____________, increments of $ ___________]