December 12, 2018 - Planning for a transition away from LIBOR to alternative risk-free rates (RFRs) has been the hot topic in 2018 across the global financial markets. On December 4^th, ICE Benchmark Administration (IBA), the administrator of LIBOR, announced the launch of a survey on the use of LIBOR currencies and tenors to determine which LIBOR setting are the most widely used. As a reminder, ICE publishes LIBOR for five currencies (CHF, EUR, GBP, JPY and USD) and seven tenors (Overnight/Spot Next, 1 Week, 1 Month, 2 Months, 3 Months, 6 Months and 12 Months). In its press release, IBA stated that it will use the results of the survey to inform its work in seeking the support of globally active banks for the publication of certain LIBOR settings after year-end 2021. IBA makes clear, however, that there is no guarantee that any LIBOR settings will continue to be published after 2021 and none of the work IBA is undertaking in this regard is intended as an alternative to transitioning to RFRs with respect to new business.  Instead, IBA’s primary goal would be to provide commonly used LIBOR settings for users with outstanding LIBOR-linked contracts that are impossible or impractical to modify. Intercontinental Exchange, the parent of the IBA, is a representative on the Alternative Reference Rates Committee and supports the work towards an orderly adoption of alternative RFRs. To that end, IBA has recently launched the ICE Term RFR Portal and published a paper indicating how IBA can support the development of term structures for alternative RFRs.

The IBA survey is open to all users of LIBOR and the comment deadline is February 15, 2019.

For an overview of the transition from LIBOR, click here and here (Loan Consultation Explanation dtd September 26th). For any questions, please contact mcoffey@lsta.org (policy), ehefferan@lsta.org (operations) or tvirmani@lsta.org (documents).