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October 1, 2020

LIBOR is Ending: Is Anyone Ready?

  • LIBOR is scheduled to phase out by the end of 2021
  • The primary reason for LIBOR’s replacement has to do with the outdated methodology which consists of a panel of banks that report their expected funding rates
  • US officials favor reliance on the Secured Overnight Financing Rate (SOFR), and rates based on actual transaction data in other major countries
  • Differences between LIBOR and SOFR include security and tenor
  • To ensure a smooth transition Benefit Street Partners is working towards including fallback language in all its credit documents