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Council approves amendment switching airport loan index from LIBOR to SOFR
Summary
The Andalusia City Council adopted Resolution 2025-31 to accept an amendment to a 2015 installment promissory note for the South Alabama Regional Airport, replacing LIBOR with SOFR as the interest-rate benchmark; council said the change does not alter the amount owed.
The Andalusia City Council unanimously adopted Resolution 2025-31 on Sept. 2 to accept an amendment to a restated installment promissory note with the South Alabama Regional Airport, changing the interest-rate benchmark from LIBOR to SOFR.
City Attorney Mark explained the loans originated in 2015 when the interest rate for the city’s note was tied to LIBOR, which is no longer published. “The secured overnight financial rate or SOFR . . . has generally become accepted as the replacement for LIBOR,” Mark said. He told council the amendment does not change the principal owed but provides a new standard to calculate interest.
A council member moved to approve the amendment and the motion was seconded; the council voted unanimously to adopt the resolution. No council member asked for further discussion before the vote.
The change updates the technical calculation for interest on the city’s loan to the airport and enables continued interest-rate calculations going forward under an accepted market benchmark. The council adjourned following completion of the item and remaining business.
The council did not specify whether the amendment requires subsequent recording or additional approvals beyond the local action recorded at this meeting.
