September 14, 2021
Great news for NY Rangers fans – Libor Hajek has re-signed for another year of play in a deal reportedly worth $875K at the NHL level and $70K in the minors. Not a bad spread adjustment from our perspective.
For those hoping that LIBOR – the London Interbank Offered Rate – would stick around beyond June 30, 2023 (or December 31, 2021, for 1-week and 2-month LIBOR), no such luck. Further delay of those dates is highly unlikely.
We are happy to report that focus is definitely shifting towards consideration of replacement rates and related document drafting, which we assume is a welcome change for the ARRC and US financial regulators. Now that Term SOFR is the recommended fallback for cash products and a recommended alternative for business loans, the loan market discussions seem to be finally moving in a direction many hoped for months ago – away from LIBOR. When we will start to see large numbers of alternative rate deals remains anyone’s guess. At this point, we would get better odds on the Rangers’ games.
Hunton Andrews Kurth’s multi-disciplinary LIBOR transition client service team is available to assist clients navigating LIBOR transition, including consideration of and drafting for term SOFR and other replacement rates. For further information, contact Tina Locatelli or Amy McDaniel Williams.