August 10, 2021 - by Meredith Coffey. The LSTA recently published its LIBOR FAQs, a list of 12 questions (and answers), including:

  • When is LIBOR ending (for new and legacy contracts)?
  • What are the potential replacement rates, and what are their economic implications?
  • What is a post-LIBOR “multi-rate” environment?
  • What are the ways that loans might transition from LIBOR to a replacement rate?
  • How pervasive are “hardwired” fallbacks?
  • What is the “legislative solution” – and will it apply to loans and CLOs?
  • Can the LIBOR replacement rates be hedged?
  • What are some of the CLO issues that should be considered in LIBOR transition?
  • What should market participants be doing now?

The LIBOR FAQs are available here on a standalone basis and also are part of the broader Summer 2021 Loans Magazine. LSTA Members with questions on LIBOR transition are encouraged to participate in the LSTA’s Weekly LIBOR Q&A Call.

The LSTA is a member of the ARRC, the body convened by the Fed to help transition from LIBOR in the US, is the co-chair of the ARRC’s Business Loans Working Group and an active member of the ARRC’s Securitization Working Group. The LSTA also developed an extensive set of SOFR Concept Credit Agreements (including, most recently, a Term SOFR document) and has a Credit Sensitive Working Group. For more information, please contact mcoffey@lsta.org or tvirmani@lsta.org.

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