IBOR Transition Digest (October 13 2020)
Published date | 16 October 2020 |
Subject Matter | Finance and Banking, Financial Services, Commodities/Derivatives/Stock Exchanges |
Law Firm | Mayer Brown |
Author | Mayer Brown |
Welcome to the latest issue of Mayer Brown's IBOR Transition Digest'a periodic compendium of global regulatory and market developments and insights on the complex issues confronting financial market participants as they plan to transition from LIBOR and its variants to replacement benchmark interest rates. As attention to IBORtransition accelerates and becomes more focused it is critical to have access to comprehensive and timely resources about the market.
For additional resources and an introduction to our global
cross-practice IBOR Transition Task Force, please visit Mayer
Brown's IBOR Transition portal.
Thought Leadership | News and Developments | Upcoming Events
THOUGHT LEADERSHIP
New Rev Proc 2020-44 Provides Limited
Relief for Amending Legacy Contracts to Add IBOR
Fallbacks
Eye on IBOR Transition blog post, 12 October 2020
Revenue Procedure 2020-44 provides retroactive but limited
relief for amending specific types of legacy contracts to add
fallback mechanics for LIBOR or other IBORs, provided such
amendments generally follow select model contract language
recommended by the ARRC and ISDA.
ISDA Board Announces Forthcoming Launch of
Fallbacks Supplement and Protocol
Eye on IBOR Transition blog post, 10 October 2020
ISDA published a statement on October 9 that its IBOR
Fallbacks Supplement and Protocol will launch on October 23, and
the ARRC and Federal Reserve Board issued supporting
statements.
The LSTA Proposes Changes to Trading
Documents for LIBOR Transition
Eye on IBOR Transition blog post, 8 October 2020
The LSTA has commenced the revision of its trading
documentation in order to clarify the applicable interest rate to
be used to calculate delayed settlement compensation on the mixture
of LIBOR- and SOFR-based loans trading in the market.
LSTA Exposes Draft Supplemental Indenture
for Legacy CLOs Without Fallbacks in Order to Facilitate Transition
from LIBOR
Eye on IBOR Transition blog post, 7 October 2020
The LSTA published an exposure draft of operative
provisions and template supplemental indenture for use in
connection with a CLO transaction that does not already contain
provisions to effect the transition from LIBOR to a non-LIBOR
benchmark rate upon the occurrence of specified LIBOR transition
events.
A Credit-Sensitive Supplement to SOFR
Borrowers' Objections
Eye on IBOR Transition blog post, 5 October 2020
While some banks believe that the interest rate on
SOFR-priced loans should be subject to increase by an additional
spread that would reflect credit risk at a particular time
borrowers have pointed out some of the problems that they see with
a credit-sensitive supplement to SOFR.
TAR Tools Have Some Explaining to
Do
Eye on IBOR Transition blog post, 2 October 2020
Traditional technology-assisted review tools can be
leveraged to help businesses with their LIBOR transition
projects.
ISDA Raises Starter Pistol on IBOR
Transition Race
Eye on IBOR Transition blog post, 30 September 2020
On September 23, ISDA's CEO provided an updated
timetable of the remaining steps to publication and effectiveness
of the ISDA IBOR Fallbacks Supplement and IBOR Fallbacks
Protocol.
SOFR Starter Kit Tools that Should be
Adopted Immediately
Eye on IBOR Transition blog post, 25 September 2020
The ARRC's SOFR Starter Kit brings together the
numerous resources that the ARRC has published to implement its key
recommendations, including links to its Best Practices, syndicated
loan conventions, refreshed recommended business loans fallback
language, and an internal systems transition guide.
Singapore Leads LIBOR Transition in
Asia
Eye on IBOR Transition blog post, 25 September 2020
Discussing recent IBOR...
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