Following the DOJ’s favourable business review letter published on October 1, 2020 (as discussed in our earlier blog post), on October 9, 2020 ISDA released a statement from its Board of Directors in relation to the IBOR Fallbacks Supplement and Protocol. In it, they state that they have kept the Australian, Canadian, EU and

On October 1, 2020, the U.S. Department of Justice’s (DOJ) Antitrust Division announced that it had completed its review of ISDA’s proposed amendments to its standard documentation to deal with IBOR discontinuation (by way of a Protocol and Supplement). The DOJ concluded that ISDA’s proposals do not harm competition, and so announced that they will not challenge them. A copy of the letter can be found here.

Continue Reading U.S. Department of Justice Issues Favourable Business Review Letter to ISDA’s IBOR Supplement and Protocol

ISDA had intended to publish a supplement to the 2006 ISDA Definitions such that new transactions incorporating them would include fallbacks for LIBOR cessation (the Supplement), and a protocol to facilitate amendments to legacy derivate contracts (the Protocol) (for more information, see our earlier blog post). ISDA initially expected publication of the supplement and protocol to occur in the coming months. However, on September 21, 2020 they published a letter in which the Protocol and Supplement timeline was updated.

Continue Reading ISDA Delays Publication of IBOR Fallbacks, Supplement and Protocol

On August 19, 2020, the ARRC updated its recommended Best Practices for the LIBOR transition in anticipation of the imminent publication of ISDA’s IBOR Fallback Protocol (the “Protocol”) (which we discussed in our earlier blog post, available here).

These updates follow the July 22, 2020 letter from ISDA (the “Letter”) (available here), in

It’s been a busy summer in the land of LIBOR transition preparation. As part of the ARRC’s ongoing efforts to prepare the cash product markets for the transition to SOFR and away from LIBOR as a benchmark interest rate, it posted ten separate releases between Memorial Day and August 7, 2020, in addition to hosting six “SOFR Summer Series” panel discussions on various SOFR topics (which were recorded and can be accessed here). This blogpost focuses on aspects of the ARRC’s releases relating to business loans.

Read on for more details, but here are a few major takeaways: (1) don’t expect any COVID related delays in the LIBOR sunset schedule – work on implementing hardwired LIBOR fallback language this fall and plan stop using LIBOR by mid-2021; (2) the ARRC now recommends simple SOFR in arrears as the best available fallback rate alternative for most business loans (at least until a term SOFR in advance market develops); and (3) feedback from the business loan market reflects a preference for following ISDA’s lead on LIBOR to SOFR transition issues whenever practicable to facilitate consistency between swaps and business loans (e.g., spread adjustments and certain conventions).


Continue Reading LIBOR Transition: Business Loans SOFR Summer Wrap Up

As the 2021 deadline for the cessation of LIBOR approaches, two key milestones for the LIBOR transition in the derivatives space are set to occur in the second half of 2020. These are the SOFR discounting switch and publication of the ISDA Protocol and Supplement amending the 2006 ISDA Definitions. Market participants anticipate that these changes will continue to increase risk-free rate (RFR) trading volumes and address liquidity concerns.

Continue Reading Liquidity Concerns and Key 2020 Milestones in the LIBOR Transition for Derivatives Transactions

On April 8, the ARRC announced that it had agreed on a recommended spread adjustment methodology for cash products referencing USD LIBOR.

The ARRC’s recommended methodology is intended for use in for USD LIBOR contracts that have incorporated the ARRC’s recommended hardwired fallback language or for legacy USD LIBOR contracts where a spread-adjusted SOFR can

In our blog post of February 11, 2020, we discussed ISDA’s re-consultation on pre-cessation triggers following the announcement by the Financial Conduct Authority that there is a possibility that LIBOR may continue to be published for a short period after regulators have announced that it is no longer representative of the underlying market (a

With the announcement by the Financial Conduct Authority that the London Interbank Offered Rate (LIBOR) may cease to exist, the financial markets are facing a major upheaval in this respect. Market participants, financial institutions and lawyers alike are working around the clock to ensure the transition from LIBOR to risk-free rates (RFRs) is as seamless as possible.

Continue Reading Replacement of LIBOR: IS Litigation Inevitable in the Derivatives Market?

Following the selection of alternative risk-free rates (RFRs) to replace each of the five LIBOR currencies: SOFR (for USD LIBOR), SONIA (for GBP LIBOR), SARON (for CHF LIBOR), TONAR (for JPY LIBOR) and €STR (for Euro LIBOR), ISDA launched consultations to obtain input from market participants on how to address the adjustments required as a