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
On December 7, 2021, the Consumer Financial Protection Bureau (“CFPB”) published its final rule (“Rule”) facilitating the transition away from LIBOR for open-end and closed-end consumer financial products. The Rule amends...more
On July 29, 2021, the Alternative Reference Rates Committee (“ARRC”) of the Federal Reserve formally announced and recommended1 CME Group’s forwardlooking Term Secured Overnight Financing Rate (“Term SOFR”) rates.2 Important...more
This is an update to a previous post. This update highlights the formal endorsement of Term SOFR by the ARRC, expands the discussion to include Ameribor and dives more deeply into the issues associated with Term SOFR swaps...more
8/4/2021
/ Alternative Reference Rates Committee (ARRC) ,
Bank Loan Markets ,
Broker-Dealer ,
CFTC ,
Compliance ,
End-Users ,
Federal Reserve ,
Financial Institutions ,
Fixed-Rate Loans ,
Interest Rates ,
Lenders ,
Libor ,
Liquidity ,
Secured Overnight Funding Rate (SOFR)
Wednesday, the ARRC announced (HERE) the expectation to endorse CME’s Term SOFR in late July or early August. One of the bigger pieces to this announcement is the announcement that U.S. regulators will also permit Term SOFR...more
In a recent speech, the new SEC Chairman, Gary Gensler, came out questioning the use of BSBY as a replacement to LIBOR, by highlighting a number of “concerns” he has with BSBY and why SOFR is preferable....more
In a press release on June 8th, the Commodity Futures Trading Commission (the “CFTC”) published its first release in a series called the “SOFR First Transition Initiative” as a best practice. One goal for this sort of “best...more
6/10/2021
/ Best Practices ,
Broker-Dealer ,
CFTC ,
Compliance ,
Dealers ,
Financial Institutions ,
Over The Counter Derivatives (OTC) ,
Regulatory Oversight ,
Secured Overnight Funding Rate (SOFR) ,
SEFs ,
Swap Dealers
Last Friday, the IBA published its Feedback Statement on Consultation on Potential Cessation.
The relevant dates regarding cessation are the same in the November request for comment – i.e., all LIBOR settings will either...more