Life After LIBOR: Recommendations for an Orderly Transition

29 September 2021

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Debtwire is pleased to present Life After LIBOR: Recommendations for an Orderly Transition, published in association with SRS Acquiom.

Firms are under pressure to finalize their post-LIBOR plans. A large share of respondents to our survey feel they are well equipped, but others remain uncertain—and many transition plans are still being discussed. In this report, we highlight the most effective transition strategies as the LIBOR deadline approaches, from the steps organizations have taken so far to the intricacies of navigating the switch to a new benchmark, as well as what the predominant benchmark is likely to be.

Key findings include:

  • More than eight-in-ten firms say they are prepared for the transition away from LIBOR, including 39% who report they are very prepared. In a survey we conducted in 2019, fewer than half as many respondents (19%) were as confident.
  • Investment banks lead the way in switching current contracts away from LIBOR: 72% have begun the transition. Hedge funds, by contrast, are lagging behind with 60% yet to initiate the changeover.
  • 75% of respondents say they have updated their internal technology systems to make them compatible with rates other than LIBOR. Two-thirds have done the same for third-party technology and operations vendors.
  • 71% of firms surveyed agree that the Secured Overnight Financing Rate (SOFR) is the right rate for at least some contracts, including 51% of respondents who strongly agree.
  • When asked their opinion on the single biggest risk of moving to SOFR, the largest share of respondents (25%) cite volatility.