LIBOR Phase Out
Farm Credit of the Virginias members with existing variable rate loans tied to a common financial market index known as LIBOR should be aware of the need to transition your loan to a different market index. We will work with you in the coming months to ensure you know your options.
LIBOR is an index rate that has been used by lending institutions for nearly 50 years to set variable rates on loans. However, due to events in world financial markets relating to LIBOR, federal regulators and governing authorities have announced that LIBOR will no longer be available and lenders and borrowers must transition to a new variable rate index by the end of June 2023.
The Farm Credit System has been working closely with the Farm Credit Administration (our regulator), the U.S. Federal Reserve, large commercial banks, and many other market participants for several months to ensure a smooth transition away from LIBOR.
If your loan is scheduled to renew prior to the end of June 2023, your lender will present you with options so that you may choose the best variable rate index for your situation. If your loan does not mature during this timeframe, your lender will still contact you in the coming months to present you with options to convert to a new variable rate index or possibly a fixed rate of your choosing.
We will provide periodic reminders, approximately quarterly, until your loan(s) are transitioned from LIBOR to a new index. In the meantime, you can search online for general information about LIBOR’s pending cessation.
Please direct questions to your loan officer.