Page 4 - Fallbacks News Today

Borrowers making the jump to SOFR before year-end are being offered more favorable spread adjustments

Over-reliance on fallbacks could lead to failures at year-end

Lack of readiness for compounded rates could sweep repacks onto synthetic Libor, creating swaps mismatch

Risk.net Corporates remain on swaps fallback sidelines Risk.net analysis finds just 14 out of 100 large non-financial firms have signed up to Isda fallback protocol Print this page   Non-financial corporates have been slow to sign up to a Libor fallback protocol devised by the International Swaps and Derivatives Association, with just 14 out of 100 of the largest listed companies adopting the standard language to future-proof swaps contracts, according to research by Risk.net.  T...

Risk.net Nearly two-thirds of CRE securitisations issued since 2019 have already triggered fallback clauses Print this page   Dozens of commercial real estate (CRE) securitisations will transition away from US dollar Libor in the coming weeks, more than two years ahead of schedule, after botched legal language was inserted into the deals. At current rates, the early changeover will hit equity investors, who take the first loss in securitised products. The problem is thought to affe...

Traders see easy switch off Libor in Swiss market at year-end Saron swaps trading still slow but traders say liquidity is rising and see no hurdles to transition Print this page   Less than a year before Swiss franc Libor is due to disappear, trading in derivatives referencing its replacement amounts to just a fraction of overall volumes – but Swiss market participants are confident transition off the tarnished benchmark remains on track. Traders and brokers say a number of hurdl...

Risk.net Report calls on market participants to end reliance on SOR in coming quarters Print this page   Banks have been told to stop offering new derivatives contracts tied to Singapore’s swap offer rate, or SOR, by the third quarter of this year, in a new transition plan unveiled on March 31. A report published by the Steering Committee for SOR and Sibor Transition to Sora proposed that financial institutions should cease the use of SOR no later than the end of September this y...

Risk.net Stay of execution, RFR illiquidity and fallback reliance slow SOFR adoption Print this page   The derivatives market’s transition to the secured overnight financing rate (SOFR) has stalled since regulators granted US dollar Libor an 18-month reprieve, with traders blaming poor liquidity and the industry’s reliance on new fallback language for a dearth of new swaps linked to the successor rate since November. Five of the most heavily used US dollar Libor fixings will su...

Consultation reveals splits over one-year transition period and internal transfer pricing models

Fallback spreads for all currencies could be fixed together, even if some benchmarks survive past 2021