Citadele Bank

Changes to loan agreements with a LIBOR base rate

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The bank’s loan agreements include an interest rate for the use of the loan which is made up of two parts: the base rate, which is variable, and the added rate, which remains fixed. The base rate is a short-term interest rate index, a standard rate used in the international financial market (the most common being LIBOR or EURIBOR), while the added rate is the rate set by the bank, adapted to each customer individually.

A European Union regulation came into force on 01.01.2018 setting standards for indexes used by financial instruments and financial agreements. The regulation sets out the requirements the standard rate must comply with in order for it to be used for loan transactions.

Bearing in mind the fact that, as of January 1st, 2022, LIBOR will no longer be maintained/published for EUR, CHF, GBP or JPY, the bank, in accordance with the requirements of EU regulation, will be making changes to all loan agreements with a base rate which uses a 3-, 6- or 12-month LIBOR rate (London Interbank Offered Rate).

If your loan currency is EUR, the LIBOR rate will automatically be replaced with a EURIBOR rate (Euro Interbank Offered Rate) on December 31st, 2021.

Meanwhile, loans in other currencies (CHF, GBP, JPY) will be offered a conversion to EUR and a similar EURIBOR rate, without commission fees for amending the agreement and converting the currency.

Bearing in mind that, as of 01.07.2023 the 3-, 6- or 12-month LIBOR standard rate in USD will no longer be offered/published, we suggest customers think about transferring their loan currency from USD to EUR in good time. If we have not agreed on a currency conversion by the deadline, the bank will replace LIBOR with another alternative index.

The bank will individually contact/inform the customers affected by these changes to agree on the best resolution going forward.

We thank you for your understanding and hope we can come to a suitable agreement.

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