Global Interest Rate Reform
Reform of LIBOR and other global benchmark rates used in loans and other financial instruments
The transition away from the London Interbank Offered Rate (LIBOR) and other IBORs is unlike any previous regulatory reform, it involves a considerable number of moving parts and is a significant technical challenge.
Banks, asset managers and corporates are focussing on the replacement timeline, planning and understanding how to make an orderly transition and Linklaters is working with a range of entities on various aspects of their transition.
Linklaters can support you through your journey or at any stage in relation to each relevant product area, bringing our unrivalled market-leading knowledge of IBOR-related issues, our depth of experience, as well as our track record of running strategic matters driven by regulatory change.
Talk to our team of experts and explore our insights on this topic below.
Global interest rate reform
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The end of 2021 marked the end, to most intents and purposes, of LIBOR. Once considered so unassailable that few, if any, agreements contemplated its permanent cessation and the initial suggestions of its demise met with incredulity. Read our note for a snapshot of what you need to know on the first London Banking Day after 1 January 2022.
The Financial Conduct Authority published a consultation paper on 24 June 2021 on its proposed decision to require synthetic LIBOR for 6 sterling and Japanese yen settings.
As the cessation, or loss of representativeness, of each of the 35 LIBOR settings gets ever closer, legislation has now been introduced in each of New York State, the European Union and the United Kingdom, aimed at addressing contractual uncertainty arising in respect of the demise of panel bank LIBOR. In this briefing we provide an overview of the status and scope of each of these legislative solutions.
The derivatives team has put together an animation to draw together developments in the derivatives market as LIBOR enters its final chapter.
In this series of podcasts, experts from Linklaters’ international banking practice consider recent developments in the transition from LIBOR to risk-free rates across different loan markets and the impact on market practice and documentation.
The European Derivatives and Structured Products team hosted a webinar on 4 May 2021 to discuss the newly published IBOR Supplement to the German Master Agreement for Financial Derivatives (DRV) and provide an update on some of the ISDA interest rate reform documents.
The Derivatives and Structured Products team hosted a webinar on 6 May 2021 and discussed the impact of the transition away from LIBOR on new and legacy structured notes and repackagings.
Linklaters has prepared a guide to assist with an understanding of, and key considerations relating to, the ISDA 2020 IBOR Fallbacks Protocol and the Supplement to the 2006 ISDA Definitions which are some of the key documents ISDA has prepared to assist market participants in managing the transition away from IBORs.
Deepak Sitlani, derivatives partner, reflects on our recent global interest rate reform half day seminar and the latest market developments.
16 March 2021
Following the Financial Conduct Authority announcement on 5 March 2021 regarding the future cessation or loss of representativeness of all 35 LIBOR benchmark settings currently published by the IBA the Finance team held this webinar on Monday 15 March to discuss this in the context of the derivatives, structured products, bonds and loans markets.
8 March 2021
The Financial Conduct Authority (the “FCA”) announced on 5 March 2021 the future cessation or loss of representativeness of all 35 LIBOR benchmark settings currently published by IBA (the “FCA Announcement”). The FCA Announcement follows the notification by ICE Benchmark Administration (the “IBA”) to the FCA that it intends to cease providing all LIBOR settings for all currencies, subject to any rights of the FCA to compel IBA to continue publication.
Thursday 21 January 2021, 13:00 to 14:00 GMT
Location: London
The recording and accompanying slides for this webinar can be found in the lower right corner of this page.
9 September 2020
The Derivatives and Structured Products team hosted an interest rate reform webinar on Tuesday 8 September with special guests Jonathan Seymour and George Oomman from Bloomberg.
Wednesday 22 April 2020, 14:00 to 15:00 GMT
Location: Global
On Wednesday 22 April we ran a derivatives and structured products webinar, where we covered the following topic:
Interest rate reform: update on the current state of the transition to RFR including a discussion of recent consultations and other market developments in the context of derivatives.
18 August 2020
Linklaters has advised The International Swaps and Derivatives Association on Version 2 of the ISDA Collateral Agreement Interest Rate Definitions and three forms of amendment agreements.
14 August 2020
“Tough legacy” in the context of the transition away from LIBOR refers to existing LIBOR referencing contracts that are unable, before the end of 2021, to either convert to a non-LIBOR rate or be amended to add fallbacks.
29 June 2020
The International Swaps & Derivatives Association (ISDA), Bloomberg and global law firm Linklaters have today launched a factsheet on IBOR Fallbacks. The guidance provides market participants with an overview of the proposed methodology to calculate adjusted risk-free reference rates (RFR) as fallbacks for key Inter Bank Offer Rates (IBORs). The factsheet also provides guidance on how ISDA will implement the rates in its forthcoming Supplement to the 2006 ISDA Definitions as well as the 2020 IBOR Fallbacks Protocol.
23 December 2019
On 20 December 2019, Benedict James spoke to Bloomberg TV about the health of the financial system.
14 November 2019
In this edition, we continue our series on global interest rate reform. The transition away from LIBOR is gaining traction as the focus increasingly shifts towards the practical implementation of new risk-free rates, with signifcant steps being taken across the fnancial markets.
26 September 2019
On 23 September 2019, the Loan Market Association published two new draft facilities agreements under which interest is calculated by reference to backward-looking compounded risk-free rates. The drafts comprise a compounded SONIA based sterling term and revolving facilities agreement and a compounded SOFR based dollar term and revolving facilities agreement.
24 June 2019
We are pleased to invite you to watch our mid-year review of the banking market, in which we highlight key developments during the first half of 2019.
14 June 2019
In this bulletin, we review the progress of interest rate benchmark reform in Hong Kong and Singapore and discuss the recent key global developments in this complex and fast-moving space.
12 June 2019
Associated British Ports (ABP), the biggest port operator in the UK, has today received consent from bondholders to switch the benchmark underpinning its £65m floating rate notes due 2022 from LIBOR to SONIA.
7 June 2019
Reform of LIBOR and other global benchmark rates used in loans and other financial instruments. The transition away from the London Interbank Offered Rate (LIBOR) and other IBORs is unlike any previous regulatory reform.
6 June 2019
On 5 June, the Bank of England, the FCA and the Working Group on Sterling Risk Free Reference Rates (Sterling RFR WG) jointly held a conference on the transition from LIBOR to alternative risk-free rates and both the FCA and PRA published feedback on the Dear CEO letter on LIBOR transition.
28 May 2019
In this edition, we continue our series examining global interest rate reform. Momentum is building in the steps being taken to transition away from LIBOR, with a number of key developments over the last six months.
23 May 2019
ISDA recently launched two market consultations - the first was on fallbacks for USD LIBOR, CDOR, HIBOR and certain aspects of fallbacks for derivatives referencing SOR and the second addressed “pre-cessation triggers”
16 January 2019
In this video, we will be discussing major developments which affected the banking market, including Brexit, global interest rate reform and lease accounting.
7 January 2019
Nearly $2trillion in loans may need to have their documentation revised following the switch off of the LIBOR (and other IBOR) benchmarks in 2021.
4 December 2018
From MiFID II to operational resilience, LIBOR reform to individual accountability, read our report to refresh yourself about what else has been keeping regulators and market participants busy and take a glimpse of what we expect to come in 2019.
23 November 2018
18 October 2018
The European Money Markets Institute (EMMI), which is the administrator for the Euro Interbank Offered Rate (EURIBOR), has published its second consultation paper on a hybrid methodology for EURIBOR.
This is important because it sets out further details regarding the new EURIBOR methodology and indicates that EMMI is confident that EURIBOR will comply with the requirements of the EU Benchmark Regulation, such that “EMMI expects to become an authorised benchmark administrator” before January 2020.
10 October 2018
As global regulators prepare for the LIBOR benchmark to be ditched by the end of 2021, analysis published by Linklaters today shows that there are more than $512billion worth of legacy bonds which will need to switch to an alternative reference rate.
19 September 2018
Set out below in an FAQ format is a brief overview of the key aspects of the Benchmarks Supplement.
6 February 2018
EMMI has announced that EONIA, in its current form, is unlikely meet the requirements of the European Benchmark Regulation.
