LIBOR Transition: Is It Really Necessary To Review Every Single Loan Agreement?

As lenders start to prepare for the transition from LIBOR to SOFR (or perhaps another rate like AMERIBOR), practical concerns of how to implement the change are coming to the forefront. Many sources have highlighted the need for due diligence on the loans in a lender's portfolio, but not many have focused on the actual scope of review that is needed.

It's a potentially daunting task—every single agreement that might bear interest or fees based on LIBOR has to be identified. Depending on the lender, this may be hundreds or thousands or hundreds of thousands of documents. They may be scattered across different offices covering different business units on different computer systems that often do not communicate with each other. The LIBOR terms in a loan may be contained in several different documents that originated from different templates, from standard LaserPro forms to highly negotiated 200-page agreements. Simply assembling the loans in a way that they can be