Our topic today is breakage costs (also called “break funding” costs) in your new SOFR credit agreements. Someone in the market recently asked: - “I have a friend (OK, it’s me) who’s negotiating a credit agreement. We...more
This was a busy week in the loan market. LIBOR transition is accelerating daily, we have a new form of credit agreement from the LSTA, and what has been deemed an “existential threat” to the syndicated loan market has reared...more
Amending Fund Finance facilities to replace LIBOR as the primary benchmark interest rate has all the makings of a potential client experience disaster for your Fund sponsor clients. This is not just theoretical – we are...more
In the last week we have had a very big development in the LIBOR transition: The ARRC has now formally recommended forward-looking Secured Overnight Financing Rate (SOFR) term rates. This is big news for your fund finance...more
The U.S. chapter of FFA Next Gen held its second virtual panel session this week, titled “Into the Unknown”: A Fund Finance Perspective on “Letting LIBOR Go.”...more
This bulletin provides a timely update on two emerging issues related to LIBOR transition – namely, requirements that administrative agents (including private credit lenders acting in that role on their facilities) may be...more
As the title suggests, U.S. LIBOR (LIBOR) is going away, with official announcements expected as soon as year-end 2020 of LIBOR’s December 31, 2021 demise. The end of LIBOR will be replete with a plethora of risks for banks,...more
As most market participants are aware, in 2017, the Financial Conduct Authority (FCA), a financial regulatory body in the UK, announced that LIBOR would be phased out. The announcement was made, in part, in recognition of the...more
The Situation: The Alternative Reference Rates Committee ("ARRC") released market consultations on the securitization and bilateral loan markets on December 7, 2018, concerning potential paths forward for benchmark (e.g.,...more