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In the Wall Street Journal, Amol Dhargalkar explains how looming LIBOR deadline will affect U.S. corporate treasury teams

Date:
December 6, 2021
  • amol dhargalkar headshot

    Authors

    Amol Dhargalkar

    Managing Partner, Board Member
    Global Head of Corporates

    Kennett Square, PA

Summary

U.S. companies will no longer be able to borrow against LIBOR starting on January 1, 2022. In the Wall Street Journal, Amol Dhargalkar explains what this means for corporate treasury teams.

Most companies will have to update their systems to handle compounded-interest calculations given that those weren’t needed on a frequent basis prior to SOFR, said Amol Dhargalkar, managing partner and global head of corporates at Chatham Financial Corp., a financial-risk adviser.

The Wall Street Journal

After the end of 2021, banks will not longer be able to issue new loans or financial contracts pinned to LIBOR. As U.S. companies plan to transition their legacy contracts to alternative reference rates and begin to borrow with new benchmark rates, their systems will have to handle new calculations. Most companies will have to update their systems to handle compounded-interest calculations given that those weren’t needed on a frequent basis prior to SOFR, said Amol Dhargalkar, managing partner and global head of corporates at Chatham Financial Corp., a financial-risk adviser. These upgrades often require additional time and money for corporate treasury teams, he said.

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About the author

  • Amol Dhargalkar

    Managing Partner, Board Member
    Global Head of Corporates

    Kennett Square, PA

    Amol is a Managing Partner and member of Chatham’s board of directors and senior leadership team. He leads Chatham’s corporates sector, with 20 years of experience, supporting clients in their hedging and risk management programs.