Today's LIBOR Rates
1 M |
0.31563 |
 |
3 M |
0.47500 |
|
6 M |
0.68794 |
|
1 YR |
1.06438 |
|
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Iceland Rejects LIBOR-Based Repayment Plan |
February 26, 2010
Daily Mail and Financial Times report that Iceland has walked out of talks with Britain and the Netherlands to negotiate debt repayment with rates based on LIBOR, the London Interbank Offered Rate. LIBOR is a filtered average of rates that banks charge each other for short-term, unsecured loans.
Britain and the Netherlands had presented a lower margin above LIBOR for repayment of $3.4 billion lost by UK and Dutch depositors in the failed Icesave online bank. Iceland rejected the reduced interest rate of LIBOR plus 2.75%, which represented a drop of nearly 3% from the previous rate of LIBOR plus 5.5%. Iceland insists on paying only the LIBOR rate with no additional margin. The country will hold a referendum to decide the repayment issue, with an overwhelming “no” vote the expected outcome.