Interest provisions in (LIBOR-based) Loan Market Association (LMA) documentation [Archived]
Interest provisions in (LIBOR-based) Loan Market Association (LMA) documentation [Archived]

The following Banking & Finance practice note provides comprehensive and up to date legal information covering:

  • Interest provisions in (LIBOR-based) Loan Market Association (LMA) documentation [Archived]
  • The interest clause in LMA facility agreements
  • Definition of LIBOR, EURIBOR and Benchmark Rate in LMA documents
  • Definition of Screen Rate in LMA documents
  • The administrator of LIBOR referred to in the LMA definition of Screen Rate
  • Implications of the change of LIBOR administrator on LMA-based facility agreements which use LIBOR as a benchmark
  • Intra-day correction, recalculation or republication of a Screen Rate
  • Process for intra-day refixing of the ICE LIBOR rate
  • Process for intra-day refixing of EURIBOR rate
  • Implications of intra-day refixing of the ICE LIBOR rate on LMA facility documentation
  • More...

Interest provisions in (LIBOR-based) Loan Market Association (LMA) documentation [Archived]

ARCHIVED: This Practice Note has been archived and is not maintained.

This Practice Note explains the Loan Market Association (LMA)’s approach to the calculation of interest in its (LIBOR based) facility documentation. It explains the calculation of interest clause (margin, London Interbank Offer Rate (LIBOR), Euro Interbank Offered Rate (EURIBOR) or other benchmark rate and mandatory costs) before focusing on how the benchmark rate (eg LIBOR) is calculated. In particular it explains:

  1. how the documents define and calculate LIBOR, EURIBOR or other benchmark rate, including how the Screen Rate is calculated—see Definition of LIBOR, EURIBOR and Benchmark Rate in LMA documents and Definition of Screen Rate in LMA documents

  2. implications for drafting of ICE Benchmark Administration Limited taking over the administration of LIBOR

  3. the implications on drafting of the ICE LIBOR Error Policy and the Euribor Intraday Refixing Policy which set out the process of refixing and republishing LIBOR and EURIBOR respectively—see Intra-day correction, recalculation or republication of a Screen Rate

  4. the waterfall of fallbacks if the Screen Rate is not available for a particular currency or tenor—see Changes to the calculation of interest

  5. definitions and provisions relating to the waterfall of fallbacks, including Interpolated Screen Rate, Reference Bank Rates and cost of funds

  6. Replacement of Screen Rate wording inserted by the LMA in order

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