Rate switch

From ACT Wiki
Revision as of 19:16, 11 March 2024 by Doug (talk | contribs) (Update for LIBOR transition progress.)
(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to navigationJump to search

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.

See also