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When and how to make the switch from USD Libor
Holders of most USD Libor-linked product technically have until June 2023 to take action on transitioning to something other than USD Libor. This can be achieved by inserting language into documentation that takes the product from referencing USD Libor to referencing something else. In the vast majority of cases, that something else is the Secured Overnight Financing Rate (SOFR). For derivatives it is typically SOFR in arrears; that’s where the liquidity is expected to be from 2022 onwards. For loans, the solution is often to transition legacy product to term SOFR. For players that have signed up to the ISDA ... (full story)