Transitioning out of LIBOR: What is the impact for trade and export finance?

Written by Amanda Montano | Dec 4, 2020 4:06:14 PM

Written by Amanda Montano and Szonja Kolbenheyer

Things have been moving quickly now on LIBOR and IBOR reforms, but with regulators in the UK, US and EU going at different speeds. Needless to say, it was a welcome development this week to see combined announcements on 30 November 2020 from the Federal Reserve Board, the Alternative Reference Rates Committee (ARRC), the LIBOR administrator ICE Benchmark Administration, the Financial Conduct Authority (FCA) and the International Swaps and Derivatives Association (ISDA). International cooperation really is needed as so many trade and export finance deals are inherently cross-border and often involve multiple currencies. The fact that USD LIBOR will be available for legacy loans until 30 June 2023 will help sectors like ours, which have been recognised

as needing a forward-looking term rate.

As the final transition away from LIBOR approaches at breakneck speed, Geoffrey Wynne, managing partner in the London office, was recently interviewed by LexisNexis to discuss the challenges and implications of preparing for cessation in the context of trade and export finance.

Key points include:

practical considerations of moving to a new rate;
the most crucial elements of trade finance documentation that need to be considered; and
what practitioners can do to prepare for the change.

Please click here for a link to the interview with Geoffrey Wynne.

As the LIBOR transition progresses, Sullivan will be posting further updates to help businesses prepare for the final countdown to the end of LIBOR.

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