On 27 July 2017, Andrew Bailey, Chief Executive of the UK Financial Conduct Authority, made a speech about the future of LIBOR stating that market participants should not rely on LIBOR being available after 2021. Work is progressing on the transition to alternative near risk-free reference rates in each of the LIBOR currencies. The LMA is working with the market, other trade associations and the regulators on the transition.
LIBOR Transition - counting down to end-2021
On 20 January 2021, we published an updated version of the list setting out RFR-referencing loans which have been publicly disclosed to date. The update reflects details of new RFR and rate switch transactions which have taken place internationally, including for the following borrowers: AstraZeneca, Ahold Delhaize, TRIG, Metropolitan Thames Valley, Target Healthcare REIT, Tong Eng Group and Sembcorp Industries. The list is not comprehensive of all loan market transactions referencing RFRs, given the private nature of the loan market. If you would like to submit a transaction for the list, please contact us.
Bank of England, FCA and Working Group on Sterling Risk-Free Reference Rates publish statement on final countdown to GBP LIBOR transition and 2021 Roadmap
On 11 January 2021, the Bank of England, the Working Group on Sterling Risk-Free Reference Rates and the UK Financial Conduct Authority published a joint statement, alongside an update to the Working Group's 2021 priorities and roadmap. The top priority is for market participants to be fully prepared for the end of GBP LIBOR by end-2021. In particular, from the end of March 2021, GBP LIBOR should no longer be used in any new lending or other cash products that expire after end-2021.
On 16 December 2020, we published an interview between Kam Mahil, Senior Director – Legal at the LMA and Brian Fraser, Senior Manager, Lending Operations & Agency – IBOR, Markets & Lending Delivery at Lloyds Bank Commercial Banking, where Brian gives his views on the agency approach to LIBOR transition. The transition from LIBOR to risk-free rates (RFRs) affects everyone in the syndicated loan market. With end-2021 fast approaching, the need to manage the transition of the legacy book and how to manage new RFR facilities shines a spotlight on the role and the approach of facility agents to LIBOR transition.