Dollar Libor transition heads for 'hardwired approach'

Adobe_Libor_575x375_28April2020
By Mike Turner
15 Jul 2020

The US Alternative Reference Rates Committee (ARRC) has updated its reference rate language for the move away from dollar Libor, with the group now recommending loans that mature after the transition have an automatic replacement reference rate that does not need special consent to be imposed. But some legal experts warn that there are still major issues with adopting this approach.

ARRC, a group of private market participants and regulators, updated its April 2019 recommendations to favour the hardwired approach rather than an alternative option called the "amendment approach" in transitioning syndicated dollar loans away from Libor and onto a new risk-free rate. 

The "hardwired approach" automatically replaces Libor with ...

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