US and European loan markets split over 'hardwire' Libor transition

Libor adobe stock 230x150 AS
By Mike Turner
16 Jul 2020

The US Alternative Reference Rates Committee (ARRC) has updated its reference rate guidance for the move away from dollar Libor that removes the need to get a lending syndicate’s consent. But trade bodies on both sides of the Atlantic do not agree on the details, writes Mike Turner, and some lawyers claim that major issues still need to be addressed before the ARRC-recommended method can work.

ARRC, a group of private market participants and regulators, updated its April 2019 recommendations to favour what is known as the “hardwired approach” rather than 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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