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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, are expected to cease by the end of 2021, although regulatory announcements in November 2020 suggest that the most prevalent tenors of U.S. Dollar LIBOR may survive 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, yet many details remain unknown. Like its peers, BOC U.S.A. is actively working on LIBOR transition. It will continue to follow developments, take necessary measures, and provide information as necessary to support a smooth transition for BOC U.S.A.’s customers.

 

BOC U.S.A. customers may have loans, hedges, leases, and/or other financial instruments tied to LIBOR that are denominated in one or more of the LIBOR currencies (the U.S. Dollar, Great British Pound, Japanese Yen, Swiss Franc, and Euro). The end of LIBOR may necessitate amendments to these financial instruments. BOC U.S.A. customers are urged to review their LIBOR exposures and to consult with legal, accounting, tax, and other advisors to discuss the impact of LIBOR cessation and probable successor rates. BOC U.S.A. expects to reach out to customers, where appropriate, to commence discussing remediation of these financial instruments.

 

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

 

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