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ARTICLE · 21 MAY 2019

ARRC Publishes Final LIBOR Transition Recommendations For Floating Rate Notes And Syndicated Business Loans

Jones Day
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Following up on its September market consultations for FRNs and syndicated loans, the ARRC published final recommended fallback language for both products on April 25, 2019.

United StatesFinance and Banking
Jones Day
Jones Day
Kim Desmarais
Kim Desmarais
Locke McMurray
Locke McMurray
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In Short

The Situation: Financial industries around the world are addressing the probable cessation of LIBOR interest rates before 2022 by, among other things, developing language designed to substitute an industry-approved successor rate—most likely to be based on the Secured Overnight Financing Rate ("SOFR") for the U.S. dollar—seamlessly in the event of such a cessation.

The Result: The Alternative Reference Rates Committee (the "ARRC") has recently released its final "fallback language" recommendations for USD-denominated floating rate notes ("FRNs") and syndicated loans. While the recommended language is "final," it leans heavily on future market developments to provide fundamental calculation conventions.

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