As co-chairs of the ARRC Securitizations Working Group, SFA has an instrumental role in helping to enable a smooth transition and, most recently, identifying the key considerations relevant to developing new issuance of securitized products based on SOFR.
On Monday, March 29, the Alternative Reference Rates Committee (ARRC) announced their Options for Using SOFR in New ABS, MBS and CMBS Products white paper identifying the key considerations relevant to developing new issuances of securitized products based on the Secured Overnight Financing Rate (SOFR).
On March 24, the New York State Legislature approved a bill presented by the Alternative Reference Rates Committee (ARRC), and supported by SFA, to clarify and promote financial stability as market participants prepare for the discontinuation of LIBOR. The bill now heads to Governor Cuomo for his signature.
At a U.S. House Committee on Financial Services hearing earlier today, Treasury Secretary Janet Yellen said federal legislation is needed to ease the transition away from LIBOR. We were glad to hear Secretary Yellen echo Federal Reserve Chairman Jerome Powell’s comments from last month. Read our CEO's statement.
On March 23, the Alternative Reference Rates Committee (ARRC) announced “it will not be in a position to recommend a forward-looking Secured Overnight Financing Rate (SOFR) term rate by mid-2021… (and) cannot guarantee that it will be in a position to recommend an administrator that can produce a robust forward-looking term rate by the end of 2021.”
On March 23, during a House Financial Services Committee (HFSC) oversight hearing, Treasury Secretary Janet Yellen stated her support for federal legislation to facilitate a smooth transition away from LIBOR. “There are certain legacy contracts where the transition could be difficult without legislation.
On March 18, SFA Head of Policy Jen Earyes participated in a webinar hosted by Dechert to discuss the discontinuation of LIBOR and recent announcements, spread adjustments, Term SOFR, and legislative solutions.
On March 5, the UK Financial Conduct Authority (FCA) and ICE Benchmark Administration (IBA) announced that the cessation of most LIBOR settings will take place at the end of this year. In response, Alternative Reference Rates Committee (ARRC) Chairman Tom Wipf stated, “The end of this long transition road is clear. We now know when a representative USD LIBOR will end and what its associated spread adjustments will be in no uncertain terms.”
This morning, March 5, the UK Financial Conduct Authority (FCA) released the
much-anticipated official announcement on the future cessation for 26 of the 35 LIBOR benchmark settings and information on the loss of representativeness for all settings. SFA is especially pleased with the adoption of an extension for USD LIBOR for legacy contracts – and continues to support a legislative solution allowing time for USD LIBOR transactions executed before January 1, 2022 to mature – as we previously supported in our prior advocacy.
The Federal Reserve (Fed) is strengthening its push for financial institutions to disclose details on their progress related to LIBOR’s discontinuation. The Fed will ask banks to provide specifics on their current LIBOR utilization, plans for amending contracts connected to the benchmark, and existing fallback provisions.