IBOR Transition Digest – Finance and Banking – Worldwide

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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 IBOR transition 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.
[1]

New IBOR Transition Tool | Thought Leadership | News
and Developments
 | Recent Events[2][3][4][5]

NEW IBOR TRANSITION TOOL

Mayer Brown Launches IBOR Transition
Readiness Survey
[6]
Press release, 17 November 2020
Mayer Brown proudly announces the launch of the firm’s
latest IBOR transition resource: an IBOR transition readiness survey[7] jointly
developed and presented by Mayer Brown and Morae to help
organizations address the complex and imminent issue of the IBOR
transition.

THOUGHT LEADERSHIP

Transition from LIBOR: An Update from
Thailand
[8]
Eye on IBOR Transition Blog, 24 November
2020
In response to the cessation of LIBOR at the end of 2021,
the Bank of Thailand has recommended the Thai Overnight Repurchase
Rate (“THOR”) as the alternative benchmark rate for the
Thai Baht Interest Rate Fixing (“THBFIX”), and has issued
Transition Milestones for financial institutions to move away from
THBFIX to THOR.

Transition from Singapore Dollar Swap
Offer Rate to Singapore Overnight Rate Average – An
Update
[9]
Eye on IBOR Transition Blog, 23 November 2020
On 27 October 2020, the Singapore benchmark transition
steering committee announced recommended timelines and a series of
market guides to assist market participants in preparing for the
transition from SOR to SORA.

Will Amending a Facility Agreement to Move
from an IBOR to an RFR Require Guarantee and Security
Confirmations?
[10]
Eye on IBOR Transition Blog, 20 November 2020
The significant investment of time and money by market
participants to amend a huge number of legacy deals to reflect a
transition from IBORs to RFRs will be exacerbated if, in addition
to amending loan agreements, it also will be necessary to obtain
guarantee and pledged collateral confirmations.

“The End is Nigh”: UK FCA Issues
Consultations Regarding Expected New Benchmark Powers in Response
to ICE Benchmark Announcement; ISDA Issues Related
Statement
[11]
Eye on IBOR Transition Blog, 18 November 2020
ICE Benchmark Administration announced its intention to
consult on the cessation of EUR, GBP, JPY, and CHF LIBOR after 31
December 2021, prompting the UK FCA to announce related
consultations regarding the exercise of its proposed new powers to
manage benchmark transition in an orderly manner, and prompting
ISDA to state that neither of these announcements constitutes an
index cessation event.

APLMA launches the first SOFR-based
facility agreements for syndicated loans in Asia
Pacific
[12]
Eye on IBOR Transition Blog, 16 November 2020
The Asia Pacific Loan Market Association has published two
discussion draft facility agreements referencing risk-free
reference rates for US dollar syndicated loan transactions in the
Asia Pacific region—one based on compounded SOFR and one
based on simple SOFR—providing a recommended market standard
for RFR calculation formulae, pricing methodology, and institution
operational practice in the Asia loan market.

“To SOFR or Not to SOFR?”:
Prudential Banking Regulators Encourage Fallback Provisions to an
“Appropriate” LIBOR Replacement Rate
[13]
Eye on IBOR Transition Blog, 6 November 2020
The regulators released a statement in which they stated
that a bank may use “any reference rate for its loans that the
bank determines to be appropriate for its funding model and
customer needs,” so long as it is robust, and related
contracts include fallback language.

ARRC Requests Changes to Bank Regulatory
Capital and Liquidity Requirements to Facilitate Transition from
LIBOR to SOFR
[14]
Eye on IBOR Transition Blog, 4 November 2020
In a detailed 25-page memorandum to U.S. prudential
banking regulators, the Alternative Reference Rates Committee
detailed concerns regarding the transition from LIBOR to SOFR and
possible effects on current U.S. bank regulatory capital and
liquidity requirements.

NEWS AND DEVELOPMENTS

United States – Syndicated and Bilateral
Loans

Statement on Reference Rates for
Loans
[15]
Federal Reserve Board, FDIC, and OCC, 6 November
2020

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