IBOR Transition | Bank Of China

The global financial industry is transitioning 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”), were discontinued at the end of 2021, although the most prevalent tenors of U.S. Dollar LIBOR will continue until mid-2023. This transition is occurring on a global basis and is an evolving process. Market participants across the financial industry are actively transitioning their legacy LIBOR exposure. This includes Bank of China U.S. Branches (“BOC US Branches”) which is an active participant in the LIBOR transition. Importantly, BOC US Branches, continues to follow industry developments, monitor the latest regulatory measures, take necessary actions, and provide information as necessary to support a smooth transition for its customers.

BOC US Branches’ 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. As the LIBOR transition progresses, it is expected that these agreements will need to be amended to allow for new benchmarks. Accordingly, BOC US Branches’ customers have been encouraged to review their LIBOR exposure 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 US Branches will continue to reach out to our customers, when appropriate, to commence discussions regarding necessary amendments to their customer agreements.

If you have any questions, please contact your BOC US Branches relationship managers.

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