Zions Bancorporation Announces Intent to Adopt AMERIBOR® as Reference Rate in Many Commercial Loan Contracts
SALT LAKE CITY–(BUSINESS WIRE)–Zions Bancorporation (NASDAQ: ZION) announced today its intent to adopt AMERIBOR® as a replacement index for the London Inter-Bank Offered Rate (LIBOR) for the largest portion of its non-syndicated commercial loans currently indexed to LIBOR. LIBOR is being phased out globally, and U.S. banking regulators have instructed banks to cease entering into new lending arrangements utilizing LIBOR, and to adopt one or more alternative reference rates by no later than December 31, 2021.
AMERIBOR® is an index created by the American Financial Exchange. It represents the volume-weighted actual borrowing costs of thousands of banks across the United States, and is compliant with International Organization of Securities Commissions (IOSCO) standards. AMERIBOR® is currently published for overnight and 30-day terms.
“We look forward to working with many thousands of our borrowing clients to smoothly transition to the use of AMERIBOR® as a reference rate in their borrowing agreements,” said Harris H. Simmons, Chairman and CEO of Zions Bancorporation. “AMERIBOR® not only reflects the actual cost of funds for thousands of participating banks, but over the past two years has also demonstrated less volatility relative to LIBOR than the Secured Overnight Reference Rate (SOFR). AMERIBOR® is also attractive for use as a reference rate because a majority of our current LIBOR-based contracts have 30-day reset dates, a feature not currently available with SOFR.”
Mr. Simmons stated that Zions intends to begin adopting AMERIBOR® in many of its credit contracts beginning this summer.
Zions Bancorporation, N.A. is one of the nation’s premier financial services companies with annual net revenue of $2.8 billion in 2020 and more than $80 billion of total assets. Zions operates under local management teams and distinct brands in 11 western states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Texas, Utah, Washington and Wyoming. The Bank is a consistent recipient of national and state-wide customer survey awards in small and middle-market banking, as well as a leader in public finance advisory services and Small Business Administration lending. In 2020, Zions ranked as the 9th largest provider in the U.S. of the SBA’s Paycheck Protection Program loans. In addition, Zions is included in the S&P 500 and NASDAQ Financial 100 indices. Investor information and links to local banking brands can be accessed at zionsbancorporation.com.
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