The FCA has doubled down on its plans to phase out LIBOR by the end of 2021, warning in a 29 April statement that “it remains the central assumption that firms cannot rely on LIBOR being published after the end of 2021.” Although the regulator recognises the challenges presented by the current operating environment under COVID-19, it notes that “continued progress” has been seen – including the first syndicated loan that will link to SONIA and SOFR, and a successful consent solicitation to convert a legacy LIBOR referencing bond, while within sterling cash markets, transition to SONIA in the bond market has been largely completed. The Working Group on Sterling Risk-Free Reference Rates (RFRWG) confirms that by the end of Q3 2020 lenders should be in a position to offer non-LIBOR linked products, while all new issuance of sterling LIBOR-referencing loan products that expire after the end of 2021 should cease by the end of Q1 2021.
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