Transition from IBORs in the loan market

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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

LMA strengthens EURIBOR fallbacks – the single currency euro exposure drafts are now recommended forms

We are pleased to have published recommended form versions of our single currency euro exposure drafts with €STR-based fallbacks. The recommended forms have not substantively changed except for the incorporation of the drafting for the ISDA/Bloomberg EURIBOR-€STR Spread Adjustment. The Users Guide to the Interest Rate Provisions has been updated to include further clarificatory commentary. The publication marks a significant milestone in implementing robust EURIBOR fallbacks in LMA documentation and we will now begin the process of updating the euro-referencing suite.

The updated documents can be found on our Documentation Hub.

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).

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.