Libor Replacements Multiply in Shift That Could Fracture Markets Nowhere is the race to succeed Libor more up in the air than in the multitrillion-dollar syndicated lending markets. Bloomberg | May 24, 2021
(Bloomberg) A slew of newer and lesser known reference rates are staking their claim to a share of the post-Libor landscape as the outlook for the space grows increasingly fractured.
Once largely considered afterthoughts in the race to replace the London interbank offered rate, a clutch of upstart challengers, from Ameribor and BSBY to ICE’s Bank Yield Index, have been gaining traction, or at least garnering more attention, in recent weeks. Their ascent comes as borrowers and bankers increasingly question whether the Federal Reserve’s long-preferred replacement, the Secured Overnight Financing Rate, is the best option for the multitude of markets that must ditch scandal-tainted Libor by year-end.
Why Ditching Libor Is Vexing the Financial World - The Washington Post
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Date
19/05/2021
The American Financial Exchange (AFX), a transparent, rules-based and self-regulated electronic market for overnight and term unsecured lending among banks, financials and corporations, announced a new forward-looking 90-day AMERIBOR® rate called AMERIBOR Term90® This new rate is in addition to the AMERIBOR Term 30® rate launched in April, and to its suite of product offerings.
As LIBOR is phased out, lenders are looking for alternative interest rate benchmarks. AMERIBOR currently provides the only overnight lending benchmark specifically designed to track activity in the unsecured lending market. these new AMERIBOR benchmarks will provide short-term borrowers and lenders with insight into future funding costs, enhancing transparency and liquidity in the short-term, unsecured market.
On April 6, 2021, New York Governor Andrew Cuomo signed into law
Senate Bill S297B/Assembly Bill 164B (the “New York Legislation”), which paves the way for a smoother transition from US Dollar LIBOR and, in particular, addresses certain “tough legacy contracts”
1 where replacement of LIBOR is not feasible due to certain legal or logistical issues. The New York Legislation is the first federal or state bill in this country signed into law that directly addresses the upcoming cessation of LIBOR.
Background
The ICE Benchmark Administration (“IBA”), the administrator of LIBOR,
released a feedback statement on March 5, 2021, explaining that the IBA would cease publication of LIBOR (i) after December 31, 2021, for one week and two month USD LIBOR, and (ii) after June 30, 2023, for all other USD LIBOR tenors (overnight, one month, three month, six month and twelve month).
PNC Bank Joins The American Financial Exchange® Date
29/04/2021
The American Financial Exchange (AFX) announced today that PNC Bank, N.A., has joined the exchange, a transparent, rules-based and self-regulated electronic market for overnight and term unsecured lending among banks, financials and corporates.
“We are honored and privileged to have PNC Bank join AFX. We share common values of commitment to main street banking and businesses,” said Dr. Richard L. Sandor, founder and CEO. “PNC sees the value of leveraging a truly national benchmark such as AMERIBOR®, which represents the borrowing costs of thousands of U.S. banks and financial institutions.”
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