July 16, 2020 - 1H20 was all about “amendment” LIBOR fallbacks in loans. Of the 288 loans that Covenant Review tracked in 1H20, 33% used a “pure” ARRC, fallback and 48% used a (similar) amendment fallback with a 51% negative consent by required lenders. But, starting 4Q20, the pressure will rise to go hardwired: It’s an ARRC Best Practice starting 9/30/20, the ARRC (and LSTA) just released refreshed – and more workable – hardwired loan fallbacks, and banking regulators will start asking about it. Start documenting your new documentation!
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Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.