06 May Documenting SOFR Loans: 8 Things for Borrowers to Think About
Although the borrower community has been actively involved in the negotiation of fallback provisions, borrowers in the United States have not had much of an opportunity to express http://www.americashpaydayloan.com/title-loans-hi their views on documentation for SOFR-priced loans
Bankers, lawyers and others involved in the loan markets transition from LIBOR to another reference rate have spent much of the past two years thinking about and drafting fallback provisions-the section of a loan agreement that describes what happens if LIBOR is not available. Now that the likely disappearance of LIBOR is less than a year and a half away, and the Alternative Reference Rates Committee (ARRC) has identified the Secured Overnight Financing Rate (SOFR) as the likely successor to US dollar LIBOR, market participants are spending more time thinking about how to document loans that provide for interest accruing at a rate based on SOFR.