Drafting For LIBOR No More – Or Not?

The announcement by Andrew Bailey (Chief Executive of the FCA) last year that the FCA would no longer compel or encourage panel banks to contribute quotations for the purposes of calculating LIBOR beyond 2021 has left the future of LIBOR in doubt – while not necessarily spelling the end of LIBOR as we know it, the FCA has made clear its focus is on developing (and smoothly transitioning towards) alternative rates.

In light of that, all eyes turn to the Loan Market Association (LMA) which has just published its revised Replacement of Screen Rate Clause for use in its standard loan documentation following consultation with LMA members and the Association of Corporate Treasurers. Cleary, until there is more certainty in the market on how replacement benchmark rates for LIBOR (and indeed EURIBOR, which is currently subject to its own process of review in order to receive authorisation in terms of the EU Benchmarks Regulation by 1 January 2020, with fallback