On October 21, 2020, the UK Government introduced the Financial Services Bill (the Bill) to Parliament. The Bill is seen as a vital step towards ensuring the UK’s continued status as a global finance hub in the post-Brexit world, and it also introduces the UK Government’s legislative fix for LIBOR-referencing contracts that face insurmountable barriers
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ISDA Announce Launch Date and Effective Date for IBOR Supplement and Protocol
Following the DOJ’s favourable business review letter published on October 1, 2020 (as discussed in our earlier blog post), on October 9, 2020 ISDA released a statement from its Board of Directors in relation to the IBOR Fallbacks Supplement and Protocol. In it, they state that they have kept the Australian, Canadian, EU and…
U.S. Department of Justice Issues Favourable Business Review Letter to ISDA’s IBOR Supplement and Protocol
On October 1, 2020, the U.S. Department of Justice’s (DOJ) Antitrust Division announced that it had completed its review of ISDA’s proposed amendments to its standard documentation to deal with IBOR discontinuation (by way of a Protocol and Supplement). The DOJ concluded that ISDA’s proposals do not harm competition, and so announced that they will…
FCA, Bank of England Urge Shift in Swaps Quoting Conventions to Assist in Transition From LIBOR
In a statement made on September 29, 2020, the Financial Conduct Authority (FCA) and Bank of England endorsed a proposal by the Working Group on Sterling Risk-Free Reference Rates (the Working Group) that the interdealer quoting convention should change such that prices be linked to SONIA, rather than LIBOR. This change was originally to be…
ARRC Hardwired Fallback Language’s First Adoption in a Syndicated Institutional Loan
As we approach the ARRC’s September 30, 2020 deadline for new issue
syndicated loans to include the ARRC’s recommended hardwired fallback
language, several market sources report that a borrower has included the
language in an amendment to its term loan and revolving facilities
documentation in what appears to be the first example of the language’s…
ISDA Delays Publication of IBOR Fallbacks, Supplement and Protocol
ISDA had intended to publish a supplement to the 2006 ISDA Definitions such that new transactions incorporating them would include fallbacks for LIBOR cessation (the Supplement), and a protocol to facilitate amendments to legacy derivate contracts (the Protocol) (for more information, see our earlier blog post). ISDA initially expected publication of the supplement and…
Loan Syndications and Trading Association Published Concept SOFR Credit Agreement
In an important step for the syndicated loan market in transitioning to SOFR and away from LIBOR as a benchmark interest rate, the Loan Syndications and Trading Association (“LSTA”) recently published what it deems a “concept” credit agreement (we’ll call it the “Concept SOFR Agreement” here) that references daily simple SOFR or daily compounded SOFR. …
ARRC Updates Recommended Best Practices in Anticipation of ISDA’s IBOR Fallback Protocol
On August 19, 2020, the ARRC updated its recommended Best Practices for the LIBOR transition in anticipation of the imminent publication of ISDA’s IBOR Fallback Protocol (the “Protocol”) (which we discussed in our earlier blog post, available here).
These updates follow the July 22, 2020 letter from ISDA (the “Letter”) (available here), in…
LIBOR Transition: Business Loans SOFR Summer Wrap Up
It’s been a busy summer in the land of LIBOR transition preparation. As part of the ARRC’s ongoing efforts to prepare the cash product markets for the transition to SOFR and away from LIBOR as a benchmark interest rate, it posted ten separate releases between Memorial Day and August 7, 2020, in addition to hosting…
FINRA Issues Guidance to Help Firms Prepare for LIBOR Transition
On August 5, 2020, FINRA issued a regulatory notice outlining steps for broker-dealers to prepare for the pending transition away from LIBOR. The notice reminds firms to “evaluate their exposure to LIBOR” and “review their preparedness to manage LIBOR’s phase-out.” While the notice expressly disclaims any agency view of “specific effective practices,” it provides questions…