On October 5, 2018, the Alternative Reference Rates Committee ("ARRC") will hold a webinar to review the recently released consultation on U.S. dollar LIBOR fallback contract language for floating rate notes. The purpose of the webinar is to help market participants understand and respond to the request for feedback during the comment period.
The ARRC seeks feedback on key fallback provisions:
- Trigger Events - events that start the transition from LIBOR to a new reference rate;
- Successor Rate "Waterfall" - a provision specifying the priority of unadjusted rates that would replace LIBOR; and
- Spread Adjustment "Waterfall" - a provision specifying the priority of spread adjustments that would be applied to the successor rate because of differences between LIBOR and the Secured Overnight Financing Rate ("SOFR").
Feedback should be submitted no later than November 8, 2018.
According to the ARRC, the webinar is part of the Committee's mandate to help in addressing risks in contracts referencing LIBOR, and builds on its work developing the Paced Transition Plan, which outlines the steps for an effective shift to the ARRC's recommended alternative reference rate, SOFR. After full consideration of all comments received, the ARRC will issue final contract language recommendations for floating rate notes for market participants' voluntary use in future LIBOR contracts.
Speakers at the webinar will be Alexis Pederson, Senior Counsel in the Wells Fargo Legal Department, and Lary Stromfeld, a Partner at Cadwalader, Wickersham & Taft LLP.
Cadwalader, Wickersham & Taft LLP assisted the ARRC with working group efforts as drafting counsel for the consultation.
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