July 27, 2017 - In the LSTA Newsletter last week, we recapped the efforts taking place to (potentially) replace LIBOR. This week, a speech by Andrew Bailey, Chief Executive of the U.K.’s Financial Conduct Authority (FCA), in which he said the FCA would not compel banks to submit to LIBOR after 2021, has the market buzzing about the impending demise of LIBOR. Bloomberg reported that LIBOR was headed for the trash heap of history, the FT reported that LIBOR was no longer fit for purpose and the WSJ offered a “Eulogy for the World’s Most Important Number”. Does this change our position from last week? In reality, there has been (and continues to be) a thoughtful process to develop and implement a potential new reference rate. The LSTA will remain engaged on this issue and, as a new reference rate is developed, will work with our members to avoid market disruption, ensure an orderly transition to the new rate and develop appropriate language for credit agreements. We encourage interested parties to see last week’s LIBOR analysis, available here.
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