Today's LIBOR Rates
1 M |
0.25781 |
 |
3 M |
0.29281 |
|
6 M |
0.49363 |
|
1 YR |
0.83488 |
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April 25, 2010
The week of April 19 saw companies around the globe conduct major transactions with rates tied to LIBOR, the London Interbank Offered Rate. These deals encompassed the issuance of bond or the refinancing of existing debt. LIBOR is a filtered average of rates that banks charge each other for unsecured, short-term loans.
Citibank played a role in two of the week’s noted LIBOR-based transactions. Associated Press reported that UPS initiated a $1.5 billion credit facility that replaced a previous $3 billion facility. Citibank is prominent among UPS’ lending group. Cost of funds will be LIBOR or Citibank’s publicly announced base rate.
In another LIBOR-based transaction, Citibank launched its second collateralized loan obligation (CLO) of the year. A CLO is a debt issuance backed by a group of commercial loans. Citibank is acting on behalf of private equity leader Apollo Management in what industry decision makers hope is a resurgence of leveraged loans, a crucial means of financing for private equity. Credit ratings of the underlying debt will determine the CLO’s tranches. Pricing will be LIBOR plus 170 points for the AAA tranche, LIBOR plus 250 points for the AA tranche and LIBOR plus 400 points for the A tranche. |
On April 21, Reuters reported that Ford sold a $1.09 billion collateralization with certain yields based on LIBOR. According to the article, Ford increased the margin above LIBOR on its short-term tranche to boost demand, while other tranches were generating significant interest from buyers. Yield on the short-term $285 million tranche was LIBOR plus 400 points, up from LIBOR plus 0 to 200 points.
Also on April 21, Reuters reported that Russia’s VEB bank is planning to sell $1 billion in domestic bonds with rates based on LIBOR. To be placed among local banks through closed subscription, the one-year bond will have a yield of LIBOR plus 100 points. LIBORATED.com has reported on VEB’s past LIBOR-based transactions including its extension of multiple corporate loans in Fall 2009.