The fourth quarter of 2017 has given rise to at least three
developments of interest to the U.S. leveraged lending
community: (1) the taking of steps now to address the
expected discontinuation of the London interbank offered rate
(LIBOR) after 2021; (2) the Republican House tax plan proposal to
limit the deductibility of interest on debt; and (3) the temporary
procedural invalidation (and possible permanent rejection) of the
U.S. Leveraged Lending Guidance.
Discontinuation of LIBOR after 2021
LIBOR is an interest rate at which banks in London are able to
obtain unsecured funding for an agreed period and currency. LIBOR
underpins trillions of dollars of financial contracts, including
bonds, loans and derivatives. Past scandals associated with the
setting of LIBOR prompted the administration of LIBOR to be moved
from the British Bankers Association to its current administrator,
Intercontinental Exchange, operating through ICE Benchmark
Administration Limited -
