The LMA Note also raises whether a Credit Adjustment Spread (
CAS) will be used in pricing to balance the need for economic parity with LIBOR when switching to an RFR, but a CAS is less likely to be used in a new Sterling LIBOR transaction.
3. Read the FMSB Draft
The FMSB Draft sets out eight draft Core Principle for the use of TSRRs, and the key message seems to be that lenders and market participants should have a very good reason for using a TSRR! It is more eloquently put in Core Principle 1:
“
Market participants should assess, in a manner consistent with this Standard and the RFR Working Group Use Cases, whether there is