LIBOR Transition: What Is The Impact On Existing Guernsey And Jersey Security?

2021 sees the phasing out of the long established London inter-bank offer rate (LIBOR), with global regulators reiterating that market participants cannot rely on LIBOR being published beyond 31 December. As the global financial market prepares itself to transition from interbank offered rates to a new era of objective quantification offered by risk-free reference rates (RFRs), financial institutions and other lenders are considering how to document the necessary amendments to a raft of legacy facilities.

At the same time lenders will need to be conscious that, in the case of secured facilities, any amendment to the underlying facility agreement may have an impact on the continued validity of security.