Lender option borrower option

Long term borrowing instrument available in the United Kingdom

Lender option borrower option or lender's option borrower's option (LOBO) is a long term borrowing instrument available in the United Kingdom. They involve periodic interest re-fixings, which incorporates two linked options:lender's option: option for the lender to set revised interest rates at predetermined interest reset dates such as annually. borrower’s option: linked option for the borrower to pay the revised interest rate or to redeem the bond although that may involve exit fees.

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