Insight

LIBOR transition 2021

Credit sensitive rates

Chris Long

Chris Long

Principal, Financial Services Solutions, KPMG US

+1 862-222-4941

Eamonn Maguire

Eamonn Maguire

Managing Director, Financial Management, KPMG US

+1 646-489-2073

Mark Nowakowski

Mark Nowakowski

Principal, Advisory, KPMG US

+1 404-222-3192

As LIBOR’s cessation date is fast approaching, financial market participants globally need to begin assessing the suitability and optionality of emerging SOFR Credit Spread Adjustments and Credit Sensitive Alternatives.

SOFR’s susceptibility to market volatility and behavior in periods of stress has strengthened the desire of banks to seek credit sensitive alternatives to SOFR. Currently, four leading publishers are in the process of developing credit sensitive rates or spreads that would more accurately reflect bank borrowing costs: IHS Markit CSA, Bloomberg BSBY, ICE BYI, & Ameribor.

This article will provide your organization insights into:

  • Regulatory and industry updates.
  • Key impact areas.
  • Product design and credit sensitive emerging options.
  • Operational readiness.
  • Contract language.
  • Communication and change management.
  • How KPMG can help.