With the potential end of LIBOR quickly approaching in only 16 months, the ARRC has been publishing many helpful resources to aid in the market’s transitions from LIBOR to SOFR, including multiple quick reference resource guides listed below.
As part of the ARRC’s Summer Series (a webinar series aimed at educating the public about SOFR and the LIBOR transition), the ARRC released the SOFR Starter Kit, inclusive of three factsheet quick reference guides about SOFR. The SOFR Starter Kit aims to assist those in the market who need to quickly familiarize themselves with the history of the transition, the key objectives and goals for the future.
The first ARRC fact sheet gives a quick background on LIBOR, why it is being replaced, what the ARRC has done and how they selected SOFR as the replacement rate. The second ARRC fact sheet takes a deeper dive into how SOFR works, with commonly asked Q&As, as well as discussing common misconceptions of SOFR. Common misconceptions include that SOFR is not appropriate for all market participants and transitioning to SOFR is less urgent due to the COVID-19 pandemic. The third factsheet (available here), provides a list of best practices, a timeline to transition, recommended fallback language and other helpful hyperlinked tools from the ARRC for more information. These factsheets are a great resource for market participants looking for quick fallback language or deadlines for their transition from LIBOR to SOFR.
The ARRC has also released a LIBOR ARM Transition Resource Guide which aims to assist the transition for LIBOR Adjustable Rate Mortgages (“ARM”). This guide includes reference information and a framework for transition inclusive of examples and templates that could assist consumers and larger market players. This guide is a living document that will continue to be updated on an ongoing basis with new questions and information. The ARRC also released the Legacy LIBOR-Based Private Student Loan Transition Resource Guide, similarly to the ARM Transition Guide, which aims to assist impacted stakeholders of LIBOR-based variable rate private student loan portfolios transitioning to the SOFR Index.
“The LIBOR Transition” is a periodic series of updates discussing reference interbank offering rates, such as LIBOR, and the challenges involved in navigating a successful transition from their use as reference rates of choice in the market. Norton Rose Fulbright has assembled a group of its lawyers from around the globe to stay on top of these issues and assist clients in the transition to new reference rates. More information can be found on our Norton Rose Fulbright web site.