On 16 August 2022, the Financial Conduct Authority (FCA) published a statement encouraging issuers and bond holders of outstanding LIBOR-linked bonds to consider taking necessary action to transition outstanding LIBOR-linked bonds to fair alternative rates.

The FCA is encouraging:

  • Issuers of remaining LIBOR-linked bonds (or those that may have a future LIBOR-linked dependency) issued under English or other non-US laws which make consent solicitation practicable, to schedule consent solicitation processes for conversion to fair alternative rates. The relevant risk free rate plus the industry-agreed spreads that have been used in successful consent solicitation exercises to date provide a model for such conversions. Responsibility for initiating this process lies with the bond issuer.
  • Holders of bonds without robust fall-backs or another mechanism to remove reliance on LIBOR, to engage with the relevant issuer(s) or their agent(s) and request that they initiate these conversion processes.

In Consultation Paper 22/11 ‘Winding down synthetic sterling LIBOR and US dollar LIBOR’ the FCA has proposed to cease the requirement to continue publication of the 1- and 6- month sterling LIBOR settings at the end of March 2023. The FCA encourages firms who will be affected by the cessation of any remaining sterling LIBOR settings, to respond to the consultation which closes on 24 August 2022.