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The market has received a lot of answers about benchmark replacement this year. We know for sure that LIBOR is going away. We also know that no new USD LIBOR loans should be originated after December 31st of this year. More recently, we now have more confidence in our LIBOR replacement as the Alternative Reference Rates Committee (“ARRC”) formally recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates for syndicated and bilateral business loans and a number of other products.
The ARRC has now formally recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates. This is big news for your fund finance deal documents. While nothing will change in your documents immediately, here is a rundown of what the ARRC's guidance means for your deals.
Cadwalader partner Jeff Nagle joins special counsel Leah Edelboim to discuss the latest in the LIBOR transition in another installment of FFF: Industry Conversations. In this conversation, Jeff gives us insight into where we are in the benchmark transition and what it means for fund finance documents.
We have been talking about the LIBOR transition a lot lately, whether here in FFF, amending deals to contemplate the benchmark transition, or working with our clients to determine the best way to address the move away from LIBOR in their credit documents.
The fund finance markets continued their healthy clip into June, with activity levels remaining elevated. Below are our observations since my last update.
Gary Gensler, Chair of the SEC, delivered prepared comments to the Financial Stability Oversight Council on June 11, in the main reiterating that the SOFR index is based on a large number of observable transactions but also criticizing the Bloomberg Short-Term Bank Yield Index (BSBY) as a LIBOR alternative.
New to fund finance or know someone who is? Here’s a guide to primers we’ve previously published in Fund Finance Friday.
As we approach the end of LIBOR, the next phase of the transition is already upon us: incorporating the new fallback rates and market conventions into our transactions. This article highlights SONIA, the Bank of England’s recommended alternative for Sterling LIBOR. We explain everything you need to know about the differences between SONIA and SOFR and how they both differ from LIBOR, discuss expected variation on how SONIA will be used in the UK versus U.S. markets, and provide a cheat sheet of key terms that you’ll soon start seeing in your loan documents (if you haven’t already).
The FFA announced a handful of items and events this week, including Diversity in Fund Finance’s newsletter launch, an upcoming FFA event on LIBOR on April 27 and a NextGen event on the oil & gas industry on April 28.
March was a big month for the LIBOR endgame. There were several big announcements, some important (but technical) developments, and new deadlines. Simply put, the March developments matter to the fund finance community because they provide certainty to market participants as to the date by which credit agreements that reference USD LIBOR will transition to an alternative reference rate and a date by which new credit agreements may not use USD LIBOR. Note that while there were other developments in March that impact a variety of financial products, this article will cover the developments that matter most to the fund finance market. Here we will break it down for you and put it in context to help you make sense of it all, and make sure you look great in front of your boss.