February 23, 2023 - As the pace of LIBOR remediation amendments is bound to accelerate in the runup to June 2023, the LSTA has published a market advisory titled “Best Practice for LIBOR Remediation Amendments” in anticipation of that unprecedented activity. The advisory brings forward much of the substance of the LSTA’s 2019 “LIBOR Transition Checklist” advisory and continues to focus on transparency, vigilance and communication.
It will be vital that market participants work together to enable efficient amendment processes. Communications around amendments need to be clear and transparent and regular amendment practice needs to be followed. Lenders need to be aware of when and where they need to accept or object a proposed amendment to achieve their desired result. This will require lenders to diligently monitor updates to relevant data rooms. It is also the case that, subject to the terms of the relevant credit agreement, lenders still be afforded adequate time to review amendments. Many credit agreements provide for a five business day period in which lenders can review and act on a proposed amendment.
Given the scale of remediation transactions that need to take place in the next four months we know the market will be tested. Following the considerations set forth in the advisory will support market efficiency and are consistent with market participants’ expectations.
For more on LIBOR remediation, please join our monthly LIBOR Q&A calls held at 3PM (ET) on the last Monday of the month.