Exposure draft of a reference rate selection agreement for use in relation to legacy transactions and the transition to alternative reference rates

Exposure draft of a reference rate selection agreement for use in relation to legacy transactions and the transition to alternative reference rates

On 25 October 2019, the LMA published an exposure draft of a reference rate selection agreement for use in relation to legacy transactions and the transition to alternative reference rates. The purpose of the reference rate selection agreement is to streamline the process of transition to alternative reference rate(s) through the use of the same form of agreement on different transactions. Key points to note on the draft reference rate selection agreement are:

  • the agreement is being published as an exposure draft only and its primary purpose is to act as a focal point for market participants for the documentary mechanics and issues that will need to be determined when transitioning syndicated loan transactions referencing existing reference rate(s) to alternative reference rate(s) 
  • a two stage amendment process is envisaged - execution of the draft reference rate selection agreement constitutes the first stage and is effectively an agreement setting out the basic terms of the amendments to the facilities agreement to reflect use of a new rate; this is followed by the execution of an

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About the author:

Miranda is a solicitor specialising in leveraged and acquisition finance. She trained at Hogan Lovells International LLP and qualified into the international banking and finance team. During her time at Hogan Lovells she worked on a variety of domestic and cross-border transactions, acting for both borrowers and lenders. She also experienced secondments to Barclays Bank PLC and Kaupthing Bank hf.