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LIBOR Fallbacks: The Deep Dive

On April 25, 2019, the Alternative Reference Rates Committee (“ARRC”) released its recommended LIBOR fallback language for syndicated loans and floating rate notes. While the ARRC also published a very helpful narrative explaining how the legal language in the fallbacks worked, sometimes it is easier to understand complicated legal language by talking to the experts.

Leaving LIBOR: Two Steps Forward

The past week has been big. After 10 months of work, the Alternative Reference Rate Committee (“ARRC”) released its recommended LIBOR fallback language for syndicated loans and floating rate notes. The LSTA co-chairs the ARRC Business Loans Working Group, was one of the drafters of the loan fallback language, and also has published an easy-to-read explanation of LIBOR fallbacks and a printable one-pager here (after login).

LIBOR Fallback For U.S. Syndicated Loans FAQs

The LSTA is a member of the Alternative Reference Rates Committee (“ARRC”), the U.S. body charged with the transition from LIBOR to a successor rate. The LSTA also co-chairs the ARRC’s Business Loans Working Group (“BLWG”), which developed LIBOR Fallback Language for Syndicated  Loans, and the BLWG’s Operations Sub-Group. Attached is the FAQ on the […]

SOFR: Got Vol? Maybe Less Than You Think

As most readers know, LIBOR is likely to go away after the end of 2021, and SOFR – the secured overnight financing rate – is likely to be the replacement for dollar-based cash markets (translation: loans). But there is a lot of confusion about SOFR. We look to dispel one point of confusion – SOFR’s volatility – below. For all the facts, we’d direct readers to the Alternative Reference Rates Committee’s (ARRC) SOFR FAQs.

LIBOR Fallbacks: The Bilateral Loans Consultation

Over the course of 2018, the transition away from LIBOR has dominated the thoughts of many financial market participants – a fact that is unlikely to change in 2019. Lenders have been working hard to develop more standard LIBOR fallback language across all business loans. In September 2018, the Alternative Reference Rates Committee (ARRC) released a syndicated loan LIBOR fallback consultation (and posted responses in December).

LIBOR Fallbacks: The Market Responds

LIBOR is somehow simultaneously both a pressing issue and a slow-motion market upheaval. A first step to avoiding the upheaval scenario is the development of fallback language across cash asset classes. (Fallback language answers the critical question “If LIBOR disappeared tomorrow, to what rate would my contract fall back?” Is it Prime? Is it SOFR? Is it the last fixed rate? Is it nothing?!)

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