Considerations for LIBOR Alternatives in Loan Documentation

Considerations for LIBOR Alternatives in Loan Documentation
Last updated: January 25, 2018
Introduction
On July 27, 2017, the U.K.’s Financial Conduct Authority (FCA) announced that banks would no longer be compelled by the FCA to support LIBOR past the end of 2021. The administrator for the LIBOR Benchmark, ICE Benchmarks Administration (ICE), has said


Read More...

FI Bulletin: Negative Interest Rates: How should I prepare?

Negative Interest Rates: How should I prepare?
May 2016

Why are negative rates now an issue?
Of course, the concern for negative rates did not develop in a vacuum. After all, negative rates are a current reality in several developed economies and many market participants in the US were already forecasting a much less


Read More...

Negative LIBOR Strategy

Negative LIBOR Strategy
Chatham Financial White Papers – May 2016
 
Negative USD LIBOR!?: A Brief Background
It was hard not to imagine Sisyphus’ allegorical rock rolling back down the hill when the topic of negative interest rates in the U.S. went viral in February. This, only a few short weeks after the Fed carefully


Read More...

The Hidden Costs of Non-Zero Interest Rate Floors in European Variable-Rate Debt Facilities

The Hidden Costs of Non-Zero Interest Rate Floors in European Variable-Rate Debt Facilities
March 2015
 
Floors above zero percent in leveraged finance transactions are not nearly as prevalent in Europe as they have been in the USA, but they have featured in an increasing proportion of European deals in recent years. The rationale for


Read More...

Talking Turkey

It’s that time of year when Americans from coast to coast start trembling with fear as they approach Thanksgiving dinner – and not just because of Aunt Ethel’s pumpkin kale casserole. This dinner table has regrettably become the annual moment most associated with awkward conversations, as everyone’s political, parenting, and pecuniary choices come


Read More...

Financial Institutions Case Study: Asset Liability Management

Financial Institutions Case Study: Asset Liability Management
Our Client:
A regional bank with a newly issued brokered CD portfolio.
Situation:
Our client was asset-sensitive and had just issued 5yr brokered CDs that paid a fixed rate of interest. The client lends to borrowers at a floating rate of interest plus a credit spread, with a


Read More...

Real Estate Case Study: Debt Ratio

Real Estate Case Study: Debt Ratio
Our Client:
A public real estate company specializing in asset management in the hospitality sector.
Situation:
Our client had paid down a significant portion of their floating rate line of credit, leaving them with a fixed/floating rate debt ratio higher than they desired. With hotel assets essentially re-pricing daily,


Read More...

Financial Zombies

It turns out that zombies are everywhere in derivatives-land, and you need only tune to the latest news to find them.


Read More...

LIBOR: The Sweetest Comeback Ever?

But the Twinkie isn’t the only thing trying to make a sweet comeback these days. LIBOR, the reference rate on hundreds of trillions of dollars in loans and swaps, spent last year going through its own public demolition, after it came out that as many as twenty large banks were named in lawsuits or investigations of rate rigging.


Read More...

Did I Just Miss the Boat?

Ok, so maybe we haven’t seen a run up in rates like this in, oh, almost three years, but that doesn’t mean it’s time to panic.


Read More...