Dear clients,

We would like to inform you that as per the requirements of Regulation (EU) 2016/1011 of the European Parliament and of the Council, with effect from 01.07.2018 the Bulgarian National Bank discontinues the performance of the activities, relating to the calculation and publishing of the reference index SOFIBOR. To this end amendments have been adopted to the Credit Institutions Act, Consumer Real Estate Loans Act and the Consumer Loan Act.

In view of the new requirements there is an Action Plan upon Essential Change or Benchmark Cancellation, adopted at United Bulgarian Bank, which is being directly applied in case the benchmarks used to date for calculating reference interest rates under loan agreements (SOFIBOR and others) are either cancelled or changed essentially. 

As per the above-stated action plan, after discontinuing the calculation and publishing of SOFIBOR by the BNB, under all loan agreements in Bulgarian leva, concluded with individuals, in which this index is being used as a reference interest rate, regardless of its weight upon calculation, the total amount of the interest, agreed with the client will be retained over a grace period of three months (by 30.09.2018 inclusive) as an absolute amount, in accordance with the most recently published and accepted by the Bank value of the index, applicable to the loan agreements as at the date of officially discontinuing the index preparation and maintenance, which value is applicable to the respective agreement and methodology.

Following the grace period expiry, in line with the Plan’s Appendix, with effect from 01.10.2018 UBB will be applying directly to all agreements a * Reference Interest Rate (RIR) + the agreed fixed margin. The RIR of the Bank has been determined in accordance with the UBB AD Methodology for Calculating the Reference Interest Rate for loans to individuals, in effect from 17.04.2018.

The Methodology has been published in UBB’s website www.ubb.bg , where you can find more detailed information about the indicators and the formula for calculating the Reference Interest Rate of UBB, as the General Information part contains info on the activities for replacement of SOFIBOR with a new RIR.

Upon a change in either the repayment schedule or upon other amendments in line with the above stated, you will be informed through the procedure, envisaged in the currently effective legislation and in the particular agreement.

 *As regards agreements for mortgage loans with a fixed interest rate over a certain period from the drawdown and a floating interest rate for the remaining period of the agreement’s effect, in case by 01.10.2018 the fixed interest rate period has not expired, the replacement of the floating interest rate with the new RIR shall be made after the expiry of the envisaged fixed period since the loan drawdown, based on the most recent RIR value, calculated in accordance with the methodology and adopted by the Bank as of 1^st March / respectively 1^st September for the year of resorting to a floating interest rate.

Regarding loan agreements, which fixed interest rate period expires during the grace period, the floating interest rate shall be calculated in accordance with the most recently published and adopted by the Bank value for SOFIBOR, which is applicable to the respective agreement and methodology + the agreed margin. With effect from 1^st October there will be direct application of a Reference Interest Rate (RIR) of UBB + the agreed fixed margin.

Sincerely,

UBB Team