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New reference interest rate “Average Deposit Index” applied by UniCredit Factoring

New reference interest rate “Average Deposit Index” applied by UniCredit Factoring

Considering that from 01.07.2018, the Bulgarian National Bank discontinues the calculation and publication of the SOFIBOR index and according to the legal requirements, UniCredit Factoring EAD will replace the SOFIBOR index with a variable reference rate Average Deposit Index (ADI) as from the day following the last day of the interest period, for which SOFIBOR was available.

The Average Deposit Index (ADI) is calculated by UniCredit Factoring based on the interest rate statistics of the Bulgarian National Bank (BNB), represented in the table “Interest rate and volumes on overnight deposits, term deposits and deposits redeemable of notice of Non-financial corporations and Households” published on the website of BNB, which can be found here (table).

The ADI is calculated by UniCredit Factoring as a weighted average interest rate on the total volume of BGN deposits of Non-financial corporations and Households in the Banking System in Bulgaria, presented in the Table.

The index is obtained by weighing the values directly derived from the Table of effective annual percentage rates for all categories of clients and types of BGN deposits, presented in the table, through their volumes from the relevant month.

The average weighed values are calculated as the sum of the multiplication of the effective annual percentage (Table) and the volume of the respective customer category and the type of deposit for the same month (Table) is divided by the sum of the volumes of all the BGN deposits for the same month. The actual value of ADI is published on the website of UniCredit Factoring on the first working day of each calendar month and applies from the first working day of the calendar month to the day preceding the first working day of the next calendar month, inclusive.

In case BNB discontinues to publish the statistic information and as a result UniCredit Factoring is unable to calculate the reference rate applicable for Factoring Agreement, UCF, in compliance with the legal requirements, will apply a Cessation plan, approved by the Board of Directors, in reference to art. 28, par. 2 from Regulation (EU) 2016/1011 of the European parliament and the Council as of 08 June 2016, regarding indexes applied as a benchmark for the purposes of the financial instruments and financial contracts or for measurement of the results of the investment funds, and for amendments of directives 2008/48/EO and 2014/17/EU and EU Regulation (EU) 596/2014 (OB, L 171/1 from 29 June 2016).

At the moment of applying the reference interest percentage of the factoring contracts, the interest rate will not be higher than the interest rate applied before this moment.

Detailed information about the application of the Methodology and examples of calculations.