JPY LIBOR
GBP LIBOR
USD LIBOR
Overnight and 12 Months
‘Synthetic’ LIBOR
Under proposed amendments to the UK Benchmarks Regulation, the FCA would have the power to require the IBA to continue publishing LIBOR settings on a “synthetic” basis using a changed methodology. The FCA has indicated that synthetic LIBOR would be based on a forward-looking term rate version of the relevant risk-free rate plus a fixed spread adjustment calculated over the same period and in the same way as the spread adjustment implemented in the IBOR Fallbacks Supplement (Fallbacks Supplement) and the 2020 IBOR Fallbacks Protocol (Fallbacks Protocol). The FCA has advised the IBA that it has no intention of using its proposed new powers to require the IBA to continue publication of any LIBOR setting beyond the intended cessation dates. However, for the LIBOR settings included in the table below, the FCA has advised the IBA that it will consult on using its proposed new powers to require the IBA to c
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The upcoming transition from LIBOR, which is published by ICE
Benchmark Administration Limited (IBA), to the Secured Overnight
Funds Rate (SOFR), which is published by the New York Federal
Reserve Bank (NYFRB), has prompted a great deal of discussion in
the world of leveraged finance. In particular, the transition from
LIBOR to SOFR creates a number of potential issues and pitfalls
under existing loan documents, including issues related to when the
transition will go into effect, discrepancies between LIBOR and
SOFR interest rate floors in loan documents and the
Thursday, February 11, 2021
If you have a credit facility based on the London Interbank Offered Rate (LIBOR), you may soon get a notice from your lender or the administrative agent on your credit facility saying that a “Benchmark Transition Event” has occurred. Here is what you need to know about what that notice really means.
ICE Benchmark Administration Announcement
On November 30, 2020, LIBOR’s administrator, the ICE Benchmark Administration (IBA), announced that it would consult on ceasing to determine one-week and two-month USD and all GBP, EUR, CHF and JPY LIBOR settings after the December 31, 2021, setting and ceasing to determine all other USD LIBOR settings after the June 30, 2023, setting. On January 25, 2021, that consultation closed, and market participants believe that the IBA will likely issue a statement about that consultation imminently.