In the past year, we've seen many changes in how interest rates are calculated. Volatility in the quoted rates for LIBOR created problems for several lenders, who suddenly found that the interest rates they were earning on some of their outstanding loans didn't cover their cost of funds. In a syndicated loan, there is additional tension between the need for each of the lenders to have its own cost of funds covered, and the problem that would be created if a situation affecting only one member of the bank group could be used to drive the interest rate up on the entire credit facility.… Continue Reading