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Q. What is averageLibor.com?
A. averageLIBOR.com is a website (the Site)
established as a service to the loan trading market to calculate the average
London Interbank Offered Rate (LIBOR) for a given period of time. The Site
provides a user with an average LIBO rate for use in calculating cost of carry
in accordance with Loan Syndications and Trading Association (LSTA) practices.
The user inputs the date range and the Site calculates the average LIBO rate.
Q. Is the average LIBO rate generated by the Site
calculated in accordance with the LSTA definition of "Average LIBO Rate"?
A: Yes, the average LIBO rate generated by the Site is calculated to satisfy the
definition of "Average LIBO Rate" contained in the LSTA Standard Terms and
Conditions for both Par and Distressed Trade Confirmations (the Standard Terms)
as most recently published.
Q. How is the average LIBO Rate calculated and
what LIBO rate is used?
A: The Site follows the LSTA Standard Terms for both Par and Distressed Trade
Confirmations and uses the 1 month US dollar LIBO rate published by the British
Bankers Association (BBA). LIBOR is the rate of interest at which banks
borrow funds from one another in the London interbank market. For any
given period, the Site takes the arithmetic mean of the LIBO rate for each day
in the period. For any day that the BBA does not publish a LIBO rate, the
previous day's rate is used. For example, LIBOR is not published on weekends, so
the rate for Saturday and Sunday is Friday's rate. For any weekday holiday on
which LIBOR is not published, the last published LIBO rate is used for that day.
Q. What date range should I use to calculate the
Average LIBO Rate?
A: Type in the following two dates: (1) the date which is two (2) Business Days before your
Commencement Date and (2) the date that is two (2) Business Days before your closing date. Under
the LSTA Standard Terms the "Average LIBO Rate" is the sum of the individual LIBO Rates in the
period from (and including) the date two (2) Business Days before your Commencement Date and to
(but excluding) the date that is two (2) Business Days before your closing date, divided by the
total number of days in this period. For example, if your Commencement Date is Wednesday, June 3
and you are closing on Friday June 26, then use June 1 and June 24 as the dates you input on the
Site. The Site will generate averageLIBOR for June 1 through (but excluding) June 24, per the
definition in the LSTA Standard Terms, and the sum of the individual LIBO Rates will be divided
by the 23 days in this range. While this date range is used to calculate the Average LIBO Rate,
it is important to remember that under the LSTA Standard Terms the "Delay Period" means the period
from (and including) the "Commencement Date" to (but excluding) the "Delayed Settlement Date".
When you calculate Compensation for Delayed Settlement you apply the Average LIBO Rate for the
number of days in the Delay Period, which may be a different number of days than those in the
period used to calculate Average LIBO Rate.
Q. How is BBA LIBOR produced and published?
A. BBA LIBOR is determined every business morning in London by the BBA. The
BBA averages the inter-bank interest rates being offered by its membership and
publishes the result.
Q. How is the "Cost of Carry" that appears on
the Site calculated?
A. The "Cost of Carry" for USD and EUR loans is calculated by multiplying the average LIBO
rate for the stated period by the purchase price (for distressed settlement) or the face amount
(for par settlement, assuming loan is fully funded), then dividing this product by 360. For all
GBP loans 365/366 is used. The quotient is then multiplied by the number of days in the stated
period. For purposes of this Site, we assume the purchase price on the Commencement Date remains
unchanged until settlement so that any adjustments required by the Standard Terms to the cost of
carry due to commitment decreases have not occurred. The "Cost of Carry" is generated for
informational purposes and each user should independently verify the actual Cost of Carry due
under any particular transaction.
Q. What is the relationship between averageLIBOR
and the LSTA and the BBA?
A. averageLIBOR is not an affiliate, partner, joint venturer, agent, or employee
of either the LSTA or the BBA. However, averageLIBOR has an arrangement
with the LSTA to be its exclusive independent provider of average LIBOR data and
averageLIBOR has agreed to maintain the Site as a benefit to LSTA members.
averageLIBOR is an official BBA licensee of LIBOR data.
Q. How do I make suggestions for improvements to
the Site?
A. If you have any suggestions to make the Site better or if there are features
or enhancements you'd like to see, please let us know. Just write us through our
contact page or call us at
212-404-6715.
Q. How can I advertise on averageLIBOR.com?
A. Advertising on averageLIBOR is a cost-efficient and highly effective way to
reach a large number of loan market participants. To learn more you can write us
through our
contact page or call us at
212-404-6715.
Q. What is the required BBA Disclaimer?
A. The BBA requires that the site include the
following information:
In consideration for BBA Enterprises Limited
("BBAE") coordinating and the BBA Libor Contributor Banks and Reuters (the
"Suppliers") supplying the data from which BBA Libor is compiled, the subscriber
acknowledges and agrees that, to the fullest extent permitted by law, none of
BBAE or the Suppliers:
- accept any responsibility or liability for the
frequency of provision and accuracy of the BBA Libor rate or any use made of the
BBA Libor rate by the subscriber, whether or not arising from the negligence of
any of BBAE or the Suppliers; or
- shall be liable for any loss of business or profits
nor any direct, indirect or consequential loss or damage resulting from any such
irregularity, inaccuracy or use of the Information.
Q. How much does it cost to use averageLIBOR.com
- $250 per year for 125 searches or $600 per year for
unlimited searches.
- $300 per year for 125 searches or $700 per year for
unlimited searches.
All unused searches expire one year after payment.
Q. How do I pay?
A. By visiting our payment
page you can quickly complete the
process. AverageLIBOR accepts AMEX, MC and VISA.
Q. Does each user have to pay separately or can one person pay for multiple
users?
A. To avoid having multiple users who work together at one institution all have
to pay separately, one person (the "Manager") can pay for use of averageLIBOR
and then name other users from that institution as "eligible users" whose
searches count toward the searches paid for by the Manager." On the payment page
there is an option for someone making a payment to elect other users at the same
institution to be named "eligible users" whose searches count toward the number
being paid for by the Manager (see "Shared Searches" link on payment page). This
will hopefully make the process easier so that only one person in a group needs
to coordinate the payment process. You may add up to 15 people in your
organization (their email address must be at the same domain). If the user you
specify does not have an account one will be created for them at that time
(their email address must be at the same domain).
Q. How long are searches good for?
A. Searches can be used anytime within one year of payment.
Q. What's your refund policy?
A. Full refund if requested in writing via our
contact page within 3 days of payment. No refund will be issued
after the 3-day trial period.
Q. What is the User Directory?
A. averageLIBOR.com has a "USER DIRECTORY" where loan market participants can
easily find contact information about one another. For an annual fee of $500 an
institution will be listed on the Directory along with the name and contact
information for up to 15 people working at that institution. The User Directory
lists Dealers, Investors (Buyside), Law Firms, Advisors and Search Firms. In
addition, an institution that lists on the User Directory will have their logo
or advertisement placed on one of our home page advertising blocks for one
month. To join the User Directory and to increase your firms market presence and
visibility by having your logo or ad placed on the home page please contact Judy
Morace through through our
contact page or call 212 404-6715.
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