BI Market Insights-How Prominent are Interest Rate Floors in Commercial Lending?

Once interest rates fell so precipitously in March, the discussion around the use of interest rate floors in commercial lending took center stage at many banks. In recent months, many banks have taken steps to hedge interest income by implementing interest rate floors for new originations as well as renewals. AFS Business Intelligence shows a clear uptick in the incidence of interest rate floors in commercial lending for both LIBOR- and Prime-based deals.