While the derivatives market had been changing fairly rapidly prior to COVID-19, 2020 market dynamics have not closed the gap between expected and observed market prices. It’s critical that corporations and institutions address the coming reference rate changes related to their derivatives and debt instruments tied to LIBOR.
As many of our readers already know, SOFR (Secured Overnight Financing Rate) has been selected by the Alternative Reference Rates Committee of the Federal Reserve to replace LIBOR in 2021.
In this video, Ruth Hardie, senior director of client services, provides an overview of what you can expect from interest rate swaps given the current large drop in rates.
On Sunday afternoon, the Federal Open Market Committee (FOMC) reduced its target rate by 100bps to a range of 0-0.25%.
Many companies will be affected by a global pandemic (should it come to fruition)—and a number are already being affected just by the containment efforts.
On March 3, 2020, the Federal Open Market Committee (FOMC) made an emergency 50bp interest rate cut in response to the Coronavirus’ impact on the U.S. economy.
David Bowman with the Federal Reserve Board has asked the Association for Finance Professionals (AFP) to be the voice of Corporate Treasury in terms of addressing LIBOR for the Alternative Reference Rates Committee (ARRC) as part of the Coordination Subgroup.
What’s the Issue? Britain is ending support of the London Interbank Offered Rate (LIBOR) on or about 2021. US regulators currently plan to replace LIBOR with the Secured Overnight Financing Rate (SOFR) curve. The pending “Illiquid LIBOR Market” and related lack of transparency will render valuations of LIBOR priced instruments troublesome.
LIBOR has been referred to as the plumbing buried in many financial contracts, and the end of LIBOR will cause a seismic shift in the financial markets.
If you use Hedge Trackers’ Outsourcing and/or Software suite (Capella) services, you might be wondering what’s going to happen when interest rate reform occurs and SOFR replaces LIBOR in early 2021.
As a follow up to FASB’s June initiative to provide accounting relief to organizations that will need to modify their contracts as LIBOR is replaced by SOFR, FASB released a proposed Accounting Standards Update on Thursday.
As the London Inter-bank Offered Rate (LIBOR) begins to phase out, many corporate treasurers have been flooded by a wave of uncertainty. Our advice has been to proactively start planning alternatives by looking out for the guidance and term structures released by accounting regulatory bodies.
At this point, LIBOR’s phasing out by Britain’s Financial Conduct Authority (FCA) may be old news. Although the topic has been a constant presence in headlines, there’s still lingering questions about what this means and what organizations should do in its wake.
The uncertainty of Brexit accompanied by the phasing out of LIBOR has turned the financial services industry in Europe on its head. As organizations take precautions amidst the uncertainty, it has become evident that the number one financial hub in the world has begun to fall from its pedestal. Until concrete decisions are finalized, the […]
Bloomberg Tax – “LIBOR’S Looming End Leaves Hedgers, Lenders in a Bind” Nicola M. White, Reporter “This is really so pervasive, it’s going to affect literally every company out there,’ said Ernie de Lachica, senior director at BDO USA LLP. Any business that has a loan likely has an interest rate tied to LIBOR, and banks making […]