Data Point

Considering the enormity of the task, the transition away from Libor as the predominant base rate in the US corporate loan market, at least so far, has gone relatively smooth. “It’s been more of a non-event than we would’ve expected,” one lender told Refinitiv LPC this week.

Beginning January 1st of this year, all new bank loan originations were expected to have a non-Libor rate tied to pricing. While some Libor loans are still being issued, the large majority of syndicated US loans have been priced to Term SOFR this year. Meanwhile, as expected, the non-regulated direct lending market has seen a lower share of 2022 deals tied to an alternate Libor rate compared to the syndicated market. In 1Q22, roughly half of US sponsored middle market direct lending deals were still being priced to Libor.

Despite the early success, there remains an estimated over 6,000 US issuers that have active loans tied to Libor that will need to transition to an alternate rate before the June 30, 2023 Libor cessation deadline.

Refinitiv LPC’s special report “SOFR’s Impact on the Loan Market” compiles analysis across various market segments highlighting aspects of the transition away from Libor. This includes the market’s shifting sentiment around credit spread adjustments (CSAs).

Request your copy by sending an email to lpc.info@refinitiv.com.