Following up on our past posts, in this update on the transition away from LIBOR (London Interbank Offering Rate), and other interbank offering rates (“IBOR”) denominated in other currencies, we discuss a Structured Finance Association (“SFA”) survey with respect to potential LIBOR transition solutions in the securitization industry.

The SFA is group of structured finance industry members with the purpose of helping consumers, investors and policymakers grow credit availability by responsible means. SFA has published a survey to poll the industry on their positions on the following questions:

  • Top choice in terms of the potential transition solutions for legacy instruments: including extension of LIBOR beyond 2021, synthetic Libor, and legislative relief;
  • Comfort level on using a replacement rate for LIBOR of SOFR + spread;
  • Comfort level on issuing SOFR-linked bonds and/or using SOFR + spread as the fallback rate for LIBOR; and
  • Opinions on ARRC’s proposal for a legislative fix in New York state (see our past post on ARRC’s proposal of potential New York state legislation, here).

Once SFA issues a report with respect to this survey, we will report back on the findings and opinions of the industry members. We urge our readers to fill out the survey while it is still open.

“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.