Podcast: Credit Funds: Replacing LIBOR – Steps To Consider Taking Now
As we kick off 2024, the focus on the unavailability of certain benchmarks continues on. To refresh, we have already seen the benchmark for US Dollars generally replaced with the Secured Overnight Financing rate as...more
General market unease in the first fiscal quarter of 2023 was evident. The back-to-back collapse of two regional banks spooked investors and the effects of two federal rate increases rippled through the market. Uncertainty in...more
Summary - As a result of the shift from LIBOR to the Secured Overnight Finance Rate (SOFR), borrowers who use interest rate swaps or options to manage interest rate risk may be asked to pay extra to maintain a hedge under...more
There are major issues arising from the phaseout of the US Dollar London InterBank Offered Rate (LIBOR), which will soon become apparent in connection with LIBOR’s fast-approaching end date. This will dramatically impact many...more
Ticking fees for extended commitment periods (often over at least 4 to 6-months) have long been a feature of committed financings in the U.S. loan market. Such fee structures were initially most common in syndicated deals,...more
One of the reasons for a reduction in the number of aircraft asset-backed securitizations (ABS) coming to market in 2022 and 2023, is the time lag between the rapid increase in interest rates by central banks and the...more
As we finish the last season of LIBOR replacement, the fund finance market is busy amending our loan documents to include SOFR as the interest rate benchmark for U.S. dollar loans. While the cessation date for USD LIBOR is...more
With USD LIBOR expected to end on June 30, 2023, there are numerous legal and financial implications to consider, especially as the pace of remediation of leveraged loans (and other commercial loans) needs to progress further...more
On December 22, GSEs Fannie Mae and Freddie Mac announced replacement indices based on the Secured Overnight Financing Rate (SOFR) for their legacy LIBOR indexed loans and securities ...more
While US dollar (USD) LIBOR has all but vanished from new-issue loans in 2022, the vast majority of the US loan market is comprised of legacy transactions that remain tied to the retiring rate. For every US institutional loan...more
On June 21, 2022, the Loan Syndications and Trading Association (“LSTA”) published its final form documents for loan parties amending credit agreements to replace London Interbank Offered Rate (“LIBOR”) with Term Secured...more
During 2021, after months of regulatory pressure to end reliance on the London Interbank Offered Rate (LIBOR), concerns were mounting that the US leveraged loan market was being too slow to adopt the Secured Overnight...more
The LIBOR transition process continues to roll along. New transactions are (mostly) being closed without using LIBOR any more, and many legacy transactions are naturally transitioning when refinanced or renewed this year....more
LIBOR Relief Included In Appropriations Bill - New York Law Concerns - The New York law enacted in April 2021 provides the ‘Get Out of Jail’ card[2] for banks from litigation relating to the LIBOR (London InterBank...more
As we usher in spring and hopefully finally say goodbye to the worst of the COVID-19 pandemic, deal volume and overall market activity remain extremely robust. With less than a week to go in an eventful first quarter, we’re...more
The “Fund Finance Market Update” panel focused on the current state of the market. Moderated by Laurie Lawler, Managing Director at Société Générale, the panel included the following: Roshan Chagan, Partner at Ares...more
It may not be the next Taylor Swift song, but a prepayment changes the Lender-Borrower relationship. In a swap, we all know there are consequences. Rather than a “breakage cost”, the swap market just calls it an early...more
Hitting the year-end deadlines was hard. Your kind words eased that pain like a week’s vacation on a remote island with no wifi. I have saved every single one of those emails, texts and LinkedIn messages and filed them away...more
Between Omicron, the holidays, and down-to-the-wire end-of-year closings, it was a hectic finish to 2021. But now that the calendar reads 2022, we wanted to reflect this week on the state of the NAV finance market and provide...more
Effective December 1, 2021, the Loan Syndication and Trading Association (LSTA) has issued a revised suite of loan trading documents modified to replace LIBOR (London Interbank Offered Rate) with SOFR (Secured Overnight...more
The active underlying deal environment comingled with the December 31st LIBOR transition deadline combined to make November the busiest month in the history of Cadwalader Fund Finance. We have no doubt that’s been the case...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
In our October 2019 alert, we advised that LIBOR (London Interbank Offered Rate) will not be available for use as an interest rate index after December 31, 2021 (the LIBOR Cessation). As the end of 2021 approaches, here is...more
Welcome to Manufacturing Updates, Pullman & Comley’s quarterly publication that summarizes important legal developments for manufacturers. Manufacturing Updates brings together insights from attorneys across our many practice...more
On July 29th, 2021, the Alternative Rates Reference Committee (the “ARRC”) formally recommended the adoption of CME Group’s forward-looking Secured Overnight Financing Rate (“SOFR”) term rates. According to the ARRC, this...more