Amendments to loan agreements using LIBOR

2021-09-15

Medicinos Bankas hereby informs that the EUR LIBOR benchmark will be replaced by EURIBOR in loan agreements.

Regulation (EU) 2016/1011 of the European Parliament and of the Council on indices used as benchmarks in financial instruments and financial contracts is effective from 2018. In line with the requirements set out by the European Union (EU), the EUR LIBOR used in bank loan agreements will start to be replaced by the EURIBOR from 1 January 2022.

As a reminder, the variable interest rate of a loan agreement consists of two parts: the variable interest component (usually EURIBOR or LIBOR) and the bank’s margin. The bank’s margin is determined individually for each client. The replacement of LIBOR will not affect the bank’s margin, which will remain as set out in your loan agreement.

Please note that LIBOR is also applicable to loans in other currencies issued to the Bank’s customers, such as Swiss Francs (CHF), British Pounds Sterling (GBP), US Dollars (USD). From 1 January 2022, the LIBOR benchmarks will not be maintained, except for USD LIBOR with durations of 3, 6, 12 months, which will be maintained until 30 June 2023. We will inform our clients separately about the use of a different benchmark to calculate the interest rate on loans issued in the above currencies.

For more information on benchmarks, their importance and changes, please visit the websites of the European Central Bank (ECB) and the Bank of Lithuania.

Clients who will be affected by the changes to LIBOR will be additionally notified by mail, email and the internet bank before the new benchmark is applied. Once informed, customers will not need to take any action and the benchmark changes will automatically take effect.

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