Trevor Borthwick

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Great Britain Pound (GBP) currency bills

On 23 November 2020, the LMA published various documents with the aim of assisting market participants looking to include active LIBOR transition mechanisms in their loan documentation. These documents are a mix of new and revised versions of existing drafts, comprising:

  • a revised version of the exposure draft multicurrency term and revolving facilities agreement incorporating rate switch provisions (lookback without observation shift);[1]
  • a new exposure draft multicurrency term and revolving facilities agreement incorporating rate switch provisions (lookback with observation shift);
  • a revised commentary document relating to both rate switch facilities agreements referred to above;
  • a new term sheet for use in conjunction with the two exposure draft rate switch facilities agreements; and
  • new supplemental wording intended as an option for parties using the LMA’s Revised Replacement of Screen Rate wording published in August 2020[2], which includes a placeholder for pre-agreed terms in a process of renegotiation. This supplementary wording is designed as a starting point for parties looking to populate this placeholder by specifying pre-agreed terms in relation to the RFR.

Continue Reading Expanding the Documentary Toolkit for Transition from LIBOR: The LMA’s Latest Volley of Documents for the Loan Markets

Stock Market

On 16 October, the Loan Market Association (“LMA”) published an updated version of a list that sets out the near risk-free rate (“RFR”) referencing loans which have been announced to date. The list is based on publicly available information and seeks to raise awareness of RFR-referencing loans by providing information on the conventions used.
Continue Reading LMA publishes latest list of RFR referencing loans

Time - Money

The LMA’S Latest Tools

On 11 September 2020, the LMA added to their complement of exposure drafts by publishing a draft multicurrency term and revolving facilities agreement incorporating rate switch provisions (the “Switch FA”).  This came on the heels of a note issued by the LMA[1] setting out optional supplementary language (the “LMA Supplement”) to be added to its existing Revised Replacement of Screen Rate Clause.

Why Is The LMA Producing These Documents Now?

The LMA has augmented its Revised Replacement of Screen Rate Clause before, but the Switch FA and the LMA Supplement were drafted in response to specific statements made by the Working Group on Sterling Risk-Free Reference Rates (“RFRWG”).  Those statements[2] (the “RFRWG Statements”) made it clear that the February 2020 form of Revised Replacement of Screen Rate Clause[3] would not satisfy the RFRWG’s objective that after the end of Q3 2020, sterling LIBOR referencing loan products should include a contractual mechanism for conversion to a suitable SONIA-based, or other alternative risk-free, rate (“RFR”).  These latest documents from the LMA are the most recent salvo in their ongoing efforts to facilitate the transition of the loan market away from LIBOR to alternative RFRs.Continue Reading Documenting LIBOR Transition in the Loan Markets: The LMA Offers New Solutions, But Others Likely Will Follow