Our transition plan.
Part of Seaside and United's transition plan will include the modification of variable rate agreements that rely on LIBOR and other rates that are based on LIBOR to calculate the agreement’s interest rate. The impact that the LIBOR transition will have on the bank and our customers will vary widely based on the types of services we provide. For example, we expect differences in the basis between LIBOR and the alternative reference rate that could impact the spread on the product.
There is also some uncertainty regarding the timing of when LIBOR will no longer be available or serve as a market rate index or when a replacement rate is put in place. Additionally, there will be differences between how LIBOR is reset compared to how an alternative rate may reset.
Despite many changes that we know are coming and the apprehension and uncertainty you undoubtedly feel, we want to reassure you that our team is working diligently to find solutions and answers while we follow guidance from the Fed and ARRC.