Rate Conversion and Continuation Clause Samples
The Rate Conversion and Continuation clause defines how interest rates are adjusted or converted when certain events occur, such as the unavailability of a benchmark rate or the end of an interest period. Typically, this clause outlines the process for selecting an alternative rate, the method for calculating the new rate, and the conditions under which the new rate will apply. Its core function is to ensure that loan agreements or financial contracts remain operational and fair even when standard reference rates change or become unavailable, thereby preventing disputes and maintaining continuity in financial obligations.
Rate Conversion and Continuation. The Borrowers shall have the right to cause a Rate Conversion or Rate Continuation in respect of Revolving Credit Loans then outstanding, upon request delivered by Holdings on behalf of the Borrowers to the Agent not later than 12:00 noon (Cleveland, Ohio time) (i) on the day which is the Banking Day that the Borrowers desire to convert any LIBOR Loans comprising a Revolving Credit Borrowing into Prime Rate Loans so as to comprise a Revolving Credit Borrowing, (ii) on the day that is three (3) Banking Days prior to the Banking Day upon which the Borrowers desire to convert any Prime Rate Loans comprising a Revolving Credit Borrowing into LIBOR Loans for a given Interest Period so as to comprise a Revolving Credit Borrowing, (iii) on the day which is three (3) Banking Days prior to the Banking Day upon which the Borrowers desire to continue any LIBOR Loans comprising a given Revolving Credit Borrowing as LIBOR Loans for an additional Interest Period of the same duration so as to comprise a Revolving Credit Borrowing, (iv) on the day which is three (3) Banking Days prior to the Banking Day upon which the Borrowers desire to convert any LIBOR Loans having a particular Interest Period comprising a Revolving Credit Borrowing into LIBOR Loans having a different permissible Interest Period so as to comprise a Revolving Credit Borrowing, provided, however, that each such Rate Conversion or Rate Continuation shall be subject to the following:
(A) each Rate Conversion or Rate Continuation shall be funded among the Lenders based upon each Lender’s Ratable Portion of such converted or continued Revolving Credit Loans comprising a Revolving Credit Borrowing;
(B) if less than all the outstanding principal amount of the Revolving Credit Loans comprising a Revolving Credit Borrowing is converted or continued, the aggregate principal amount of such Revolving Credit Loans converted or continued shall be (1) in the case of LIBOR Loans, not less than Three Million Dollars ($3,000,000) or additional increments of One Million Dollars ($1,000,000) in excess thereof, and (2) in the case of Prime Rate Loans, not less than Five Hundred Thousand Dollars ($500,000) or additional increments of One Hundred Thousand Dollars ($100,000) in excess thereof;
(C) each Rate Conversion or Rate Continuation shall be effected by each Lender by applying the proceeds of the Loan resulting from such Rate Conversion or Rate Continuation to the Loan of such Lender being converted or continued, as the ...
Rate Conversion and Continuation. Prior to the advance of the Principal Sum to the Borrower, the Borrower delivered to the Bank an initial borrowing request in which the Borrower designated the Types of Portions of such advance that are, respectively, Base Rate Portion and LIBOR Portions. From and after such advance, but subject to the terms and conditions of this Note, the Borrower shall have the right to cause a Rate Conversion or Rate Continuation in respect of any Portion then outstanding, upon request delivered by the Borrower to the Bank not later than 12:00 noon (Cleveland, Ohio time) (i) on the day that is the Banking Day on which the Borrower desires to convert any LIBOR Portion into a Base Rate Portion, and (ii) on the day that is three (3) Banking Days prior to the Banking Day on which the Borrower desires to (A) convert any Base Rate Portion into a LIBOR Portion for a given Interest Period, (B) continue any LIBOR Portion as a LIBOR Portion for an additional Interest Period of the same duration, or (C) convert any LIBOR Portion having a particular Interest Period into a LIBOR Portion having a different permissible Interest Period.