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IBOR Transition

The global financial industry is preparing to transition away from “interbank offered rates” (“IBORs”) to new alternative rates. Specifically, most currency-tenor pairs of a key IBOR, known as the London Interbank Offered Rate or LIBOR, have ceased at the end of 2021, although the most prevalent tenors of U.S. Dollar LIBOR will last until mid-2023. This transition is happening on a global basis and is an evolving process. Market participants across the financial industry are actively working on LIBOR transition plans. Align with the industry-wide progress, BOC U.S.A. is also an active participant in the LIBOR transition. Importantly, it continues to follow industry developments, monitor the latest regulatory measures, take necessary measures, and provide information as necessary to support a smooth transition for its customers.

 

BOC U.S.A.’s customers  have loans, hedges, leases, and/or other financial agreements tied to LIBOR that are denominated in one or more LIBOR currencies, including the U.S. Dollar,  British Pound, Japanese Yen, Swiss Franc, and Euro. When LIBOR ceases to be available it is expected that these agreements will have to be amended to allow for new benchmarks. Accordingly, BOC U.S.A. customers have been encouraged to review their LIBOR exposures and to consult with their own legal, accounting, tax, and other advisors to discuss the impact of the LIBOR cessation and probable successor rates. BOC U.S.A. intends to reach out to its customers, where appropriate, to commence discussions regarding necessary amendments to their customer agreements.

 

If you have questions, please contact your BOC U.S.A. relationship manager.

 

You may also find the following websites informative for further reference: 

 

Alternative Reference Rates Committee (ARRC)

https://www.newyorkfed.org/arrc

 

The LIBOR Transition Hub from International Swaps and Derivatives Association (ISDA)

https://www.isda.org/2020/05/11/benchmark-reform-and-transition-from-libor/

 

Federal Reserve Bank of New York publishes Secured Overnight Financing Rate (SOFR):

Daily SOFR

https://apps.newyorkfed.org/markets/autorates/SOFR

30/90/180-Day SOFR

https://apps.newyorkfed.org/markets/autorates/sofr-avg-ind#Chart12

 

CME Term SOFR

https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html

 

LIBOR Transition Hub from Bloomberg

https://www.bloomberg.com/professional/solution/libor-transition/

 

LIBOR Transition Hub from UK’s Financial Conduct Authority (FCA)

https://www.fca.org.uk/markets/libor

 

LIBOR Transition Hub from the Bank of England (BoE)

https://www.bankofengland.co.uk/markets/transition-to-sterling-risk-free-rates-from-libor