US resource centre

Tom Deas represented the NACT at this recent webinar outlining the implications of the adoption of Basel III to the US banking environment. These changes may have material consequences for corporates in the US, so a recommended watch. You can access the webinar 'SIFMA Basel III Endgame Roundtable' from the link below. Tom participates in the session titled ‘The Impacts of the Basel Endgame on End-Users, the Capital Markets, and the U.S. Economy’ which starts around an hour in.

The FCA has announced that a ‘synthetic’ US dollar LIBOR will be published for 1-, 3- and 6-month settings until 30 September 3024. This is to assist with an orderly transition of legacy transactions that do not fall back to alternate reference rates at cessation on 30 June 2023 – primarily but not exclusively those contracts not under US law.

With an estimated USD5 trillion in contracts referencing LIBOR and maturing after June 2023 being in cash products (loans, bonds and the like), the ARRC has published a guide to support the active transition of legacy LIBOR cash products. This is particularly relevant as reverting to/relying on fallbacks may have unintended consequences in the cash markets, particularly as there is no consistent approach to fallbacks in these markets. Essential reading for all holders of cash products referencing LIBOR, this press release offers both word and pdf versions of the guide.

The ARRC’s latest update summarising the progress in USD transition.

The US banking regulators responded to a letter sent by the NACT and other US treasury associations which flagged concern about the apparent lack of engagement by US banks in LIBOR transition. Much has changed since the original letter in April, but the response from the leading regulators puts banks on notice that they are watching carefully to ensure there are no unintended consequences for Main Street USA, and by association corporates exposed to USD LIBOR.

LIBOR to SOFR Transition – Challenges in the Path Ahead Alternative Reference Rates Committee