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Tuesday, April 6, 2021 Much information has been published in recent months on the discontinuation of The London Inter-bank Offered Rate (LIBOR) and what is to replace it. Set out below is a summary of what has happened and how it is likely to affect corporates.  WHAT HAS HAPPENED? Regulators have expressed concerns about the suitability of the LIBOR benchmark as far back as 2017, and the need for an alternative. Whilst LIBOR will continue to be available until the end of 2021, thereafter representative LIBOR rates (i.e., rates which represent the underlying market) will no longer ...

The LMA Note also raises whether a Credit Adjustment Spread ( CAS) will be used in pricing to balance the need for economic parity with LIBOR when switching to an RFR, but a CAS is less likely to be used in a new Sterling LIBOR transaction. 3. Read the FMSB Draft The FMSB Draft sets out eight draft Core Principle for the use of TSRRs, and the key message seems to be that lenders and market participants should have a very good reason for using a TSRR! It is more eloquently put in Core Principle 1: “ Market participants should assess, in a manner consistent with this Standard and the RFR Work...