On 30 March, the LMA published finalised versions of its forms of facility agreement for loans referencing RFRs as part of its library of recommended forms (the RFR templates). The new templates, which have been in circulation for some time as exposure drafts, were published just in advance of the 31 March deadline set by the Working Group on Sterling Risk-Free Reference Rates for the cessation of new sterling LIBOR loans extending beyond the end of 2021. The RFR templates reflect the recommendations of the Working Group on Sterling Risk-Free Reference Rates and familiarity with their terms is essential for all market participants.
The terms of the RFR templates are materially different to loans on LIBOR terms. To assist treasurers approaching RFR-linked loans for the first time, Slaughter and May, in conjunction with the Association of Corporate Treasurers, have produced a Borrower’s Guide to the LMA’s RFR templates. This new Guide provides essential background to RFR lending terms from the borrower’s point of view, alongside a detailed commentary on the interest rate and related provisions of the RFR templates, highlighting the aspects that borrowers might seek to adjust or negotiate.
