Should You Switch Your LIBOR Debt?
Nov 28, 2011
With the eurozone upheaval in the financial markets, farmers may want to consider changing any LIBOR-based debt that they currently have or anticipate having in the future.
Almost all loans these days are based upon some type of index. The most common ones are the prime rate, LIBOR and some type of U.S. Government loan index. For the last few years, loans tied to LIBOR have perhaps seen lower rates than loans tied to the prime rate or other indexes.
However, now that issues with the eurozone are getting more dire every day it seems, farmers may want to switch any LIBOR loans over to a more stable and possibly much cheaper index. To do this, you would need to check with your banker, but all farmers who have LIBOR-indexed loans should at least check this out.