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).
As LSTA members may know, after receiving a number of extension requests, the comment deadline for the ARRC’s syndicated loan LIBOR fallback consultation was extended toNovember 26, 2018. This will allow sufficient time for banks, investors and – importantly! – companies to answer questions about the type of LIBOR fallbacks they need in their syndicated loan agreements. (As a reminder, a LIBOR fallback is contractual language that answers the question, “If LIBOR ceases, to what rate does my loan fall back?”).
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Membership in the LSTA offers numerous benefits and opportunities. Chief among them is the opportunity to participate in the decision making process that ultimately establishes loan market standards, develops market practices, and influences the market’s direction.