Subsequent Rate Conversion Clause Samples
The Subsequent Rate Conversion clause defines the process by which an initial interest rate or pricing mechanism is changed to a different rate after a specified period or upon the occurrence of certain events. Typically, this clause outlines the timing, calculation method, and reference benchmarks for the new rate, such as converting from a fixed rate to a floating rate after a set number of years. Its core practical function is to provide a clear and predictable framework for adjusting financial terms over time, thereby managing interest rate risk and ensuring both parties understand how future payments will be determined.
Subsequent Rate Conversion. At any time following the effectiveness of a Benchmark Replacement in accordance with this Section, Bank shall have the right, by providing written notice to Borrower, to convert the then-current Benchmark to a different Alternative Rate in accordance with and subject to the conditions set forth in clause (1) of the definition of “Benchmark Replacement.” Such Alternative Rate shall be deemed to be a “Benchmark Replacement” hereunder and will replace the then-current Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. on the tenth (10th) Business Day after the date notice of such Benchmark Replacement is provided to Borrower without any amendment to this Note or any other Loan Document, or further action or consent of Borrower.