LIBOR Transition

The global financial industry is preparing to transition away from a key benchmark interest rate — the London Interbank Offered Rate, or LIBOR — to new alternative rates. Regulators have called for a market-wide transition away from LIBOR by June 30, 2023.

If you have an adjustable-rate consumer loan or commercial loan, chances are some of your transactions may be tied to LIBOR, or certain investments you hold might use LIBOR as a benchmark. This transition does not affect fixed-rate loans

As the industry shifts away from LIBOR to alternative reference rates, Peapack-Gladstone Bank will be there to help you understand the new rates and how these changes may impact your transactions going forward.

This global transition is an evolving process.  Many details are still unknown.  We will continue to follow developments, take necessary measures, and provide critical information to support a smooth transition for our clients.

Update to the LIBOR Transition:
On 3/5/21, the ICE Benchmark Administration (IBA), the administrator of LIBOR, announced it will cease the publication of 1-week and 2-month LIBOR rates as of 12/31/21. The remaining, and most commonly used LIBOR rates (overnight, 1-month, 3-month, 6-month, and 12-month), will continue to be published through 6/30/23.

Peapack-Gladstone Bank stopped offering new commercial loans based on LIBOR in mid-2021.

Loans with interest rates based on LIBOR that mature before 6/30/23, and are approved for renewal or extension, will be transitioned to an alternate rate index.

Loans with interest rates based on LIBOR that mature after 6/30/23, will be transitioned to an alternative rate index with a spread adjustment (if necessary) to make the new rate comparable to the original LIBOR based rate.

Peapack-Gladstone Bank is considering several alternate rate indices including the Wall Street Journal Prime Rate and the Secured Overnight Financing Rate (SOFR).  We will be contacting all clients impacted by this transition prior to the maturity of their loans, and well before 6/30/23. We encourage you to visit this website and the resources below for additional updates.