What is the process for converting Variable Spread Loans into Fixed Spread Loans?
A borrower with a Variable Spread Loan that wishes to access the Fixed Spread Loan’s embedded conversion options can amend the loan agreement into a Fixed Spread Loan. The pricing of the converted loan will depend on whether the Variable Spread Loan was invited to negotiate before or after 1998 and will be subject to a 0.03% conversion fee per annum. Once the loan is converted, borrowers have access to interest rate and currency conversions as well as embedded options for caps and collars. For more information, please visit Transforming Old IBRD Loans.
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