Rate switch: Difference between revisions
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imported>Doug Williamson (Create page. Sources: Linked pages.) |
(Update for LIBOR transition progress.) |
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1. ''Interest rates - reference rates - transition from LIBOR to other RFRs - loan agreements''. | 1. ''Interest rates - reference rates - transition from LIBOR to other RFRs - loan agreements''. | ||
In | In the context of LIBOR transition, rate switching meant switching a reference interest rate in a loan agreement from LIBOR to another appropriate risk-free rate, because of the discontinuation of LIBOR. | ||
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[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
[[Category:Corporate_finance]] | [[Category:Corporate_finance]] | ||
[[Category:Financial_products_and_markets]] | |||
[[Category:Identify_and_assess_risks]] | |||
[[Category:Investment]] | [[Category:Investment]] | ||
[[Category:Long_term_funding]] | [[Category:Long_term_funding]] | ||
[[Category:Manage_risks]] | [[Category:Manage_risks]] | ||
[[Category:Risk_reporting]] | |||
[[Category:Risk_frameworks]] | [[Category:Risk_frameworks]] | ||
[[Category: | [[Category:The_business_context]] | ||
Latest revision as of 19:16, 11 March 2024
1. Interest rates - reference rates - transition from LIBOR to other RFRs - loan agreements.
In the context of LIBOR transition, rate switching meant switching a reference interest rate in a loan agreement from LIBOR to another appropriate risk-free rate, because of the discontinuation of LIBOR.
- Hardwired rate switch wording accommodated in RCF
- "Alongside its ESG core, the RCF was one of the first products of its kind to include hardwired switch wording to anticipate the discontinuation of LIBOR.
- In a market dominated by efforts to build contingencies against COVID-19, Ahold Delhaize faced challenges with encouraging its lenders to focus and align on that aspect of the deal.
- However, in light of the firm’s track record as a credible borrower with a clear IBOR reform plan, constructive legal counsels and a facility agent were able to accommodate the feature operationally.
- Rewarding discussions, concluded in a tight time frame, produced wording that satisfied all parties and set an example for other deals to follow."
- ACT Deals of the Year Awards 2020 - Ahold Delhaize
2. Market rates.
Any other change of an applicable rate.