On November 30, 2020, ICE Benchmark Administration (“IBA”), the administrator of U.S. Dollar LIBOR (“USD LIBOR”) and other IBORs, lowered the pressure with respect to the upcoming cessation of USD LIBOR. IBA announced that, following a consultation in December and January, (i) it intends to cease publication of 1-week and 2-month USD LIBOR at the

When amending a material term of a loan transaction that includes guarantees and/or security governed by the laws of several jurisdictions, it is often prudent for creditors to obtain guarantee and/or security confirmations to ensure that the amendment does not adversely affect their rights to claim under the guarantee or enforce the security.  As we head toward 2021, it is well documented[1] that loan agreements with final maturities beyond the end of 2021 that are priced by reference to an IBOR benchmark will need to be amended unless they contain fallback provisions that stipulate a replacement rate for, or procedure for replacing, the relevant IBOR.  So, will changing the benchmark rate necessitate guarantee and/or security confirmations, or will this additional hurdle be something that can be avoided?
Continue Reading Will Amending a Facility Agreement to Move from an IBOR to an RFR Require Guarantee and Security Confirmations?

Borrowers and administrative agents in the syndicated loan markets continue to negotiate and fine-tune various fallback provisions related to LIBOR transition. Although pricing had traditionally been considered a “sacred right” requiring all lender approval, one of the most ubiquitous aspects to these LIBOR-transition-related fallback provisions is limiting or removing syndicate members’ consent rights to the replacement rate in the name of easing the logistics of such a massive overhaul. In fact, both the “Amendment Approach” and the “Hardwired Approach” recommended by the Alternative Reference Rates Committee (“ARRC”) have moved away from an all-lender standard. Although moving to a lesser standard should ease the pain of transition, prudent syndicate members will review these fallbacks with caution. Below is a list of LIBOR-transition-related issues that syndicate members should consider before making a commitment to lend.
Continue Reading Three LIBOR Transition Considerations for Syndicate Lenders