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.
A Guide to the ISDA 2020 IBOR Fallbacks Protocol and IBOR Fallbacks Supplement
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.
Linklaters publishes factsheet on IBOR Fallbacks with ISDA and Bloomberg.
The factsheet provides market participants with an overview of Bloomberg’s methodology of calculating fallback rates following IBOR cessation, as well as explaining how ISDA will implement the rates in its documentation.
On Wednesday 22 April 2020 we ran a derivatives and structured products webinar, where we gave an 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.
Speaking after our Future of Global Interest Rate Reform seminar, ISDA’s Rick Sandilands highlights in this short video two consultations ISDA is currently conducting on benchmark fallbacks and encourages market participants to engage with these consultations ahead of the 12 July 2019 closing date.
Since the announcement on 27 July 2017 by Andrew Bailey, Chief Executive of the Financial Conduct Authority, of the intention to transition away from LIBOR to alternative reference rates by the end of 2021, the market has been focussing on how best to address this major change.
In this short, three minute video we outline the background to, and key implications of, the transition away from LIBOR.
Watch Benedict James who spoke to Bloomberg TV, on 20 December 2019, about the health of the financial system. On LIBOR he cautioned against underestimating the challenges of transition, the scale of change and what it means for legacy contracts.
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.
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.
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.
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.
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”
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.
Since the formal recommendation of SONIA in the UK as the preferred risk-free reference rate to replace Sterling LIBOR as a reference rate in financial products, market participants have been focusing on how to transition to using SONIA.
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.
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.
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