March 9, 2021 - The ARRC confirms that in its opinion the March 5, 2021 announcements by ICE Benchmarks Administration and the U.K. Financial Conduct Authority on future cessation and loss of representativeness of the LIBOR benchmarks constitutes a “Benchmark Transition Event” (“BTE”) with respect to all USD LIBOR settings pursuant to the ARRC recommendations regarding more robust fallback language for new issuances or originations of LIBOR floating rate notes, securitizations, syndicated business loans, and bilateral business loans and published FAQs on the occurrence of a BTE. The implications of the BTE for standard ARRC fallback language for business loans is two-fold: for standard ARRC amendment approach fallback language, the occurrence of a BTE means the borrower and the administrative agent may begin the amendment process to replace USD LIBOR although the effectiveness of the amendment could not take place before the “Benchmark Transition Start Date” defined in the relevant credit agreement; in both ARRC amendment approach and hardwired approach fallback language, the administrative agent in a syndicated loan facility or the sole lender in a bilateral loan is required to notify the relevant transaction parties of the occurrence of the BTE.

An exposure draft of the LSTA’s generic form of notice will be finalized on March 10th.

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