S&P Global speaks to Matthew Tevis about banks' focus during the LIBOR transition
Summary
S&P Global examined the choices banks face after the December 2021 deadline, recommending against new LIBOR transactions. Matthew Tevis provided insight on how Chatham's bank clients view the transition and what their focus has been at the start of 2022.
S&P Global Market Intelligence"For those Libor-based loans that have been swapped, our bank clients are focused on minimizing any future rate differences between the loans and related hedges," Tevis added.
Most banks have developed transition plans, and many have given flexibility for replacing Libor, whereas some have decided to negotiate amendments with borrowers, said Matthew Tevis, global head of financial institutions at Chatham Financial.
"For those Libor-based loans that have been swapped, our bank clients are focused on minimizing any future rate differences between the loans and related hedges," Tevis added. "That approach may involve amending the underlying loan agreement to match the fallback Sofr rate used as part of the [International Swaps and Derivatives Association] protocol."
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