Clifford Chance

US Dollar LIBOR Transition: Challenges for Securitizations and Note Issuers

February 21, 2020

On January 21, 2020, the Alternative Reference Rates Committee (the "ARRC") published a consultation regarding spread adjustments for cash products such as floating rate notes and securitizations. This consultation solicits input from market participants regarding calculation methodologies for spread adjustments. The ARRC has committed to recommending spread adjustments as part of its efforts to provide robust contractual fallback provisions to facilitate the transition from US Dollar LIBOR-based floating rates to SOFR-based floating rates. The year 2020 is a critical year for preparing for LIBOR cessation. This briefing discusses benchmark transition challenges related to LIBOR-based floating rate notes and securitizations and related issues to be considered by floating rate note issuers, securitization sponsors and servicers.

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