Treasurer Authorized to Renegotiate Bank Loan
Resolution text
Resolved, That the Executive Committee of Executive Council authorizes the Treasurer of the Domestic & Foreign Missionary Society (DFMS) to modify the current agreement with U. S. Bank (Bank) to renegotiate the current term loan outstanding in the principal amount of $$20,802,800 as follows:
a) Extend the term for five years ending January 23, 2026 with
b) An effective fixed interest rate below the current 3.19% per annum
and be it further
Resolved, That the Treasurer is authorized to incorporate an interest rate swap or similar derivative instrument to reduce the effective fixed interest rate further; and be it further
Resolved, That the Treasurer is hereby authorized, empowered and directed to take such further action on behalf of DFMS as they deem necessary to effectuate the foregoing.
Explanation
The current Term Loan expires January 20, 2021. The Bank has approved an extension to January 26, 2026 at a variable interest rate equal to monthly LIBOR plus 1.15%. The Bank further indicates that a swap arrangement today could provide the DFMS an effective annual fixed interest rate of 1.71%. The “terms” of the new swap will be updated based on when the Treasurer and the Bank actually lock the rate. The terms will then be memorialized in a “confirmation” after the rate is locked.