LIBOR is an interest rate benchmark which has been phased out. No new loan facilities should be using LIBOR. From 1 January 2022, publication of most LIBOR settings ended. The US dollar LIBOR panel ended on 30 June 2023. The overnight and 12-month US dollar LIBOR settings have now permanently ceased. The 1-, 3-, and 6-month US dollar settings will continue to be published under a synthetic methodology. Work is ongoing on the transition of legacy LIBOR facilities to alternative near risk-free rates and there is work to do in transitioning IBORs in a number of currencies. The LMA is working with the market, other trade associations and the regulators on the transition.
Countdown to cessation of synthetic US dollar LIBOR
(1-month, 3-month & 6-month synthetic US dollar LIBOR)
LMA publishes South African law revised replacement of screen rate language to assist with JIBAR transition
On 2 November 2023, we published a user guide and revised recommended form of replacement of screen rate clause for the LMA’s South African law documents (“SA revised replacement of screen rate clause”).
The SA revised replacement of screen rate clause is based on the LMA’s existing 2018 revised replacement of screen rate clause (as updated) produced in the context of LIBOR transition. However, it also has regard to the work of the MPG on sample reference language for bilateral loans and reflects specifics of the South African market and JIBAR transition. In order to provide additional context, there are footnotes explaining any differences in the LMA clause and the MPG sample clause.
On 31 October 2023, we published an updated CORRA Schedule which provides drafting for term CORRA in addition to compounded CORRA.
In addition, we have updated both our CORRA Schedule and TONA Schedule to reflect the updated definition of the “Daily Rate” in the updated IG compounded rate documents to provide for an interim fallback to a historic rate (prior to the application of a central bank rate plus any adjustment spread). This addresses what is sometimes referred to as the “Good Friday issue”.
LMA publishes exposure draft term €STR rate switch document for member feedback and updated IG compounded rate documentation
On 26 October 2023, we published an exposure draft multicurrency term and revolving facilities agreement which incorporates term €STR fallbacks from EURIBOR. This is accompanied by a cover note and a separate commentary.
Given the lack of market practice for incorporating term €STR fallbacks from EURIBOR, we are inviting our members to provide comments on the exposure draft by 5pm (London time) on 8 December 2023 (see the Commentary for further details on how to respond).
We also published updated versions of our investment grade compounded rate facilities agreements, along with updated versions of the related term sheets and commentaries.