As a commercial borrower, your loan is likely based upon LIBOR, a benchmark that will be abolished as of June 30, 2023. In such cases, your loan documents may or may not contain language that specifies how the bank may convert to a substitute benchmark to replace LIBOR.

Some lenders may seek to advantage themselves by calculating conversion spreads in their favor that could range from a few basis points to double-digit differences. Those differences could translate to a six-figure cost to borrowers over the term of the loan. As an example, just a seven-basis point (.07%) differential in the spread would amount to more than $100,000 in additional interest costs on a $20MM 10-year loan with a 25-year amortization.

The CMAC Conversion Oversight Team

CMAC Partners has established a Conversion Oversight Team that will work on behalf of borrowers to monitor the current loan terms and negotiate with lenders to agree upon a new de facto spread over a replacement benchmark (likely SOFR) that equates to the previous LIBOR spread. This service will be provided for a flat fee of $5,000.

IMPORTANT NOTICE TO ALL CMAC BORROWERS

The $5,000 fee will be waived for CMAC clients who elect to engage these services.

You will be contacted by a member of our team within the next 30 days or you may reach out to Mariela Araujo at (407) 264-7256 at your convenience to start the process.

In the meantime, should you be contacted by your bank, please contact us immediately so that we can provide timely service.