With the end of LIBOR in sight, on January 11, 2021 the Bank of England, FCA and Working Group on Sterling Risk-Free Reference Rates (the Working Group) published a joint statement on the final countdown to the ceasing of publications of all GBP LIBOR settings at the end of 2021 and an updated 2021 Roadmap
LIBOR Transition Blog
Latest from LIBOR Transition Blog - Page 3
UK Working Group Publishes Paper on Credit Adjustment Spread Methodologies
With the end of LIBOR drawing closer, the FCA, Bank of England and the Working Group on Sterling Risk-Free Reference Rates (the Working Group) are encouraging market participants to actively transition from referencing LIBOR rates in their loan agreements to risk-free rates (such as SONIA). In this respect, one important aspect that market participants need…
Key Date Reminder: Go-live of ISDA’s IBOR Fallbacks Supplement and Protocol
Following years of consultations, ISDA published its long-awaited IBOR Fallbacks Supplement to the 2006 ISDA Definitions (the Supplement) and Protocol on October 23, 2020. The Supplement and Protocol provide a standardized and efficient means of transitioning derivatives contracts currently referencing IBORs to risk-free rates (more information on which can be found in our earlier blog…
IRS Revenue Procedure 2020-44: Floating Rate Fallback Flexibility from the Feds
The IRS recently released Revenue Procedure 2020-44 (“Rev. Proc. 2020-44”) which provides helpful relief to taxpayers by providing that if a contract referencing an IBOR is modified to incorporate specific ISDA or AARC fallback language for the replacement of IBORs, such modification will not cause certain adverse tax consequences, such as exchange treatment under Section…
ICE Benchmark Administration Proposes Extension of Most U.S. Dollar LIBOR Tenors Through June 2023; Move is Supported by the UK Financial Conduct Authority
On Monday, November 30, 2020, ICE Benchmark Administration (“IBA”), as administrator of LIBOR, announced that it will consult in early December 2020 on its plan to cease publication of the overnight and one-, three-, six- and 12-month U.S. Dollar LIBOR (“USD LIBOR”) settings immediately following the LIBOR publication on June 30, 2023.[1] This announcement…
UK Loan Market Association Publishes New and Updated LIBOR Transition Documentation
On November 23, 2020, the Loan Market Association (the “LMA”) announced the publication of several new and revised documents, with the purpose of helping market participants incorporate appropriate transition mechanisms into their loan documentation.…
Signals or Noise in November for LIBOR Transition?
Several remarks and releases by public officials and significant regulatory bodies in the first weeks of November garnered significant attention by financial institutions trying to discern next steps in the wind-down of USD LIBOR.…
ICE Benchmark Administration and UK FCA Announce LIBOR Endgame Consultations
On November 18, 2020, the LIBOR administrator ICE Benchmark Administration (IBA) announced that they will consult on their intention to cease publication of GBP, EUR, CHF and JPY LIBOR settings across all tenors. Their announcement also indicated that IBA remain in talks with the FCA, other official sector bodies and panel banks regarding the future…
Regulator Joint Statement Highlights Need to Move on from LIBOR (But For Some, Not Necessarily to SOFR)
On November 6, 2020, Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency (“OCC”), and the Federal Deposit Insurance Corporation (“FDIC”) (collectively, the “Agencies”) issued a joint “Statement on Reference Rates for Loans” (the “Joint Statement”).…
“Leave the World Behind” ─ ISDA Publishes 2020 IBOR Fallbacks Supplement and Protocol
On October 23, 2020, ISDA published its long-awaited IBOR Fallbacks Supplement to the 2006 ISDA Definitions (the Supplement) and Protocol. The publication is a result of years of consultations with regulators and market participants and seeks to provide a solution for the trillions of dollars of IBOR-referencing derivatives contracts. The Supplement and Protocol provide a…