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ARTICLE · 11 MARCH 2021

Pitfalls And Issues For Lenders To Consider In Connection With LIBOR To SOFR Transition

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The upcoming transition from LIBOR, which is published by ICE Benchmark Administration Limited (IBA), to the Secured Overnight Funds Rate (SOFR), which is published by the New York Federal...

United StatesFinance and Banking
Akin Gump Strauss Hauer & Feld LLP
Akin Gump Strauss Hauer & Feld LLP
Clare M. Joyce
Clare M. Joyce
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The upcoming transition from LIBOR, which is published by ICE Benchmark Administration Limited (IBA), to the Secured Overnight Funds Rate (SOFR), which is published by the New York Federal Reserve Bank (NYFRB), has prompted a great deal of discussion in the world of leveraged finance. In particular, the transition from LIBOR to SOFR creates a number of potential issues and pitfalls under existing loan documents, including issues related to when the transition will go into effect, discrepancies between LIBOR and SOFR interest rate "floors" in loan documents and the need to obtain lender consents. Lenders should pay careful attention to these issues and consider whether any changes to their existing loan documents or other loan documentation is necessary.

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