Tough legacy: Difference between revisions

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imported>Doug Williamson
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(Update for cessation of LIBOR.)
 
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''Interest rates - reference rates - LIBOR transition.''
''Interest rates - reference rates - LIBOR transition.''


In this context 'legacy' contracts are existing contracts (1) referencing LIBOR (2) that do not include fallback provisions that cater satisfactorily - or at all - for the continuation of the contract upon LIBOR being permanently discontinued.
In the context of LIBOR transition, 'legacy' contracts were contracts (1) referencing LIBOR (2) that did not include fallback provisions that catered satisfactorily - or at all - for the continuation of the contract upon LIBOR being permanently discontinued.


'Tough legacy' contracts are once that both (1) contain inadequate fallbacks and (2) are impossible or very difficult to amend in advance of the end 2021 deadline for the cessation of LIBOR.
'Tough legacy' contracts were ones that both (1) contained inadequate fallbacks and (2) were impossible or very difficult to amend in advance of the deadline for the cessation of LIBOR.




:<span style="color:#4B0082">'''''Tough legacy contract examples'''''</span>
LIBOR ended in September 2024.
 
*Certain bonds (because the use of consent solicitations to transition legacy LIBOR bonds is costly, time-consuming and may require the consent of all of the bondholders).
*Certain bilateral and syndicated loans (due to the diverse nature of borrowers, questions of cost and resource availability and other challenges).
*Certain derivatives (particularly where these are used to hedge an exposure which is itself considered tough legacy or forms part of a more complex structure).
 
:''A practical guide to LIBOR transition - Slaughter and May - September 2020, p11''




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*[[Derivative]]
*[[Derivative]]
*[[Fallback]]
*[[Fallback]]
*[[Financial Conduct Authority]] (FCA)
*[[Hedging]]
*[[Hedging]]
*[[Legacy]]
*[[Legacy]]
*[[LIBOR]]
*[[LIBOR]]
*[[Parliament]]
*[[Risk-free rates]]
*[[Risk-free rates]]
*[[Syndicated loan]]
*[[Syndicated loan]]
*[[Synthetic LIBOR]]
*[[Transition]]
==Other resource==
*[https://www.bankofengland.co.uk/news/2024/october/the-end-of-libor The end of LIBOR - Press release - Bank of England - 1 October 2024]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_products_and_markets]]
[[Category:Identify_and_assess_risks]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Manage_risks]]
[[Category:Risk_reporting]]
[[Category:Risk_frameworks]]
[[Category:The_business_context]]
[[Category:The_business_context]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_products_and_markets]]
[[Category:Identify_and_assess_risks]]
[[Category:Investment]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Long_term_funding]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Manage_risks]]
[[Category:Risk_reporting]]
[[Category:Risk_frameworks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:The_business_context]]
[[Category:Financial_products_and_markets]]

Latest revision as of 07:18, 4 October 2024

Interest rates - reference rates - LIBOR transition.

In the context of LIBOR transition, 'legacy' contracts were contracts (1) referencing LIBOR (2) that did not include fallback provisions that catered satisfactorily - or at all - for the continuation of the contract upon LIBOR being permanently discontinued.

'Tough legacy' contracts were ones that both (1) contained inadequate fallbacks and (2) were impossible or very difficult to amend in advance of the deadline for the cessation of LIBOR.


LIBOR ended in September 2024.


See also


Other resource

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