U.S. Leveraged Loans Are Seen Ditching Libor Within Weeks

July 29, 2021, 9:04 PM

The U.S. leveraged loan market could soon pivot away from the London interbank offered rate for new deals after officials endorsed a series of forward-looking benchmarks tied to its main U.S. replacement.

The Federal Reserve-backed Alternative Reference Rates Committee’s ratificationof a term structure for the Secured Overnight Financing Rate should allow bankers and borrowers to begin using the benchmarks as soon as September, according to Meredith Coffey, executive vice president of research & public policy at the Loan Syndications and Trading Association.

The shift would represent a dramatic change for the more than $1 trillion leveraged loan market, ...

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