On 5 March 2021, the UK Financial Conduct Authority confirmed the future cessation and loss of representativeness of: (i) all 7 euro LIBOR settings, all 7 Swiss franc LIBOR settings, the Spot Next, 1-week, 2-month and 12-month Japanese yen LIBOR settings, the overnight, 1-week, 2-month and 12-month sterling LIBOR settings and the 1-week and 2-month US dollar LIBOR settings immediately after 31 December 2021; and (ii) the overnight and 12-month US dollar LIBOR settings by 30 June 2023. 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
The US Alternative Reference Rates Committee (the "ARRC") has formally recommended CME Group's forward-looking SOFR term rates. The recommendation marks the completion of the ARRC's Paced Transition plan and is a major milestone in the transition away from USD LIBOR. According to the ARRC, market participants "now have all the tools necessary" for a successful transition away from USD LIBOR.
£RFR Working Group calls for parties to loan agreements to actively transition legacy GBP LIBOR loans by end-Q3
The Working Group on Sterling Risk-Free Reference Rates (the Working Group) has reiterated its recommended end-Q3 deadline for the active transition of LIBOR-linked loans, and emphasised the importance of robust fallbacks where active transition is not possible. This includes action for multicurrency loans, especially where other benchmarks are due to cease or become unrepresentative at the end of 2021.
On 29 July, we published an updated version of the list setting out RFR-referencing loans publicly disclosed to date. The update reflects SOFR transactions for: a JV managed by Van Weelde Shipping Group; Bunge (the first SOFR-linked export finance transaction in Singapore); and Oman's BankDhofar. The update also reflects the UK's first PPP LIBOR transition announced by HICL. The list is not comprehensive of all loan market transactions referencing RFRs given the private nature of the loan market.
Please contact Kam Mahil to submit a transaction to the list.