Libor In Loan Agreements

Given the monumental task that will involve changing each credit agreement with a LIBOR rate, it is worth thinking about what such a change should be to succeed in the task. Is all this really necessary? At the end of the day, LIBOR disappears. If the concept is to remove LIBOR from the agreement, does it really matter whether the agreement uses the term LIBOR or adjusted libor, or something else like the Eurodollar rate? If the concept is to remove LIBOR rate periods and replace them with SOFR interest rate periods, is it really important that the applicable provision be in section 2.4 of a given loan agreement and not in section 2.3? Given the monumental task that will involve changing each credit agreement with a LIBOR rate, it is worth thinking about what such a change should be to succeed in the task. Industry groups continue to move forward and are trying to reach consensus on recommended approaches for libor transition. With regard to derivatives, the International Swaps and Derivatives Association (ISDA) plans to publish changes to the 2006 definitions as well as a protocol incorporating these definitions into the old contracts. . . .

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