How Loan Prices Compare Across the United States
Loan Pricing Corp.'s recent survey of lenders to middle-market companies shows that last year was a banner year for borrowing, nationwide. Compared with 1993 rates, loan prices dropped across the United States.
The loan prices are pegged to London Interbank Offered Rate (LIBOR) rather than to the prime rate, which tends to run about 250 basis points above LIBOR. "That's because over the past two years, LIBOR pricing has become more available to middle-market companies -- those with annual sales from $50 million to $125 million -- and, over time, it winds up being a better financial deal," notes Allen Dudley, an analyst at Loan Pricing's New York City headquarters. If your current borrowing is not tied to LIBOR, you may be able to lower costs by making the switch.* * *
(Numbers are the additional basis points paid above the LIBOR rate.)
New England 217/212
South Central 208/196
Source: "Gold Sheets Middle Market," Loan Pricing Corp., January 1995, New York City.* * *