July 29, 2021 - The Loan Syndications and Trading Association (“LSTA”), the trade association for the corporate loan market in the United States, today issued the following statement regarding the announced decision today by the Federal Reserve’s Alternative Reference Rates Committee (“ARRC”) to recommend CME’s Term SOFR Rates for use in ARRC recommended fallback language and in new contracts where usage is consistent with its Best Practices, such as business loans where shifting from LIBOR to an overnight rate has been difficult.
“The LSTA applauds the ARRC for formally recommending CME Group’s forward-looking Term SOFR following the successful launch of the SOFR First initiative. This is the critical final step; at this point, all parties that wish to use Term SOFR for loan or CLO origination can do so. This recommendation should facilitate the successful transition away from LIBOR.”
Profile for the LSTA: