IBOR Transition Digest (October 13 2020)

Published date16 October 2020
Subject MatterFinance and Banking, Financial Services, Commodities/Derivatives/Stock Exchanges
Law FirmMayer Brown
AuthorMayer 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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