CLOs Are Winning Fights on Libor Switch With Millions at Stake

Money managers are notching some early victories in a conflict with millions of dollars at stake, as they push back against companies over how the end of scandal-plagued Libor will affect interest rates on loans.

The US dollar London interbank offered rate is due to be retired at the end of June, and about three-fourths of the $1.4 trillion US leveraged loan market still has to switch to the preferred new benchmark, SOFR. The difficulty is that Libor is usually higher than SOFR on any given day.

Companies are generally offering to tack on extra interest on top of the ...