Transition from IBORs in the loan market

IBOR Transition

LIBOR is an interest rate benchmark which has been phased out. No new loan facilities are able to use LIBOR. As of 1 October 2024, there are no remaining LIBOR settings being published. There is still some ongoing work on the transition of legacy LIBOR facilities and there is work to do in transitioning IBORs in a number of currencies and strengthening fallbacks to remaining IBORs (namely EURIBOR). The LMA continues to work with the market, other trade associations and the regulators on RFR transition and will continue to keep the market updated through this microsite as well as regular blogs.

Latest News

SA MPG publishes form of ZARONIA Rate Switch Amendment Agreement

The South African MPG Legal Workstream has published a form of ZARONIA Rate Switch Amendment Agreement for the syndicated loan market in South Africa. It is designed to amend syndicated ZAR single currency facility agreements governed by South African law to transition from JIBAR to ZARONIA. It incorporates the rate switch provisions from the LMA SA Rate Switch Agreement (which are based on the MPG ZARONIA loan conventions).  

As Good Friday approaches, we wanted to remind users to check the SIFMA calendar.  The LMA has optional wording in its documentation to have a historic RFR as an initial fallback to an RFR – this was due to circumstances where SOFR was not published on an RFR Banking Day and the fallbacks to SOFR became relevant.  This wording is being rolled out to the entire LMA suite.  View the LMA “Users guide to the interest rate provisions in the LMA facility agreements” for more details.

Article 118-bis - Italian Consolidated Law on Banking

We have been receiving questions on Article 118-bis which requires loan agreements to include clauses dealing with changes to a benchmark.  This is impacting loan agreements, including outside of Italy.

Since mid-2024, we have been working proactively with our members on this, including through the EURIBOR Fallbacks Task Force. The LMA documentation published in December 2024 assists market participants with implementing robust EURIBOR fallbacks. We are working with the market on developments in implementation to assist with efficiency in the market. 

 

Video Content

Preparing for the ZARONIA transition- Loan Markets Association guidance on repapering agreements

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LMA Webinar On Demand - Transition from IBORs in the loan market: Where are we now? June 2024

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