18 Nov 2021

USD loans - Countdown to SOFR … but which one?


From 1 January 2022 lenders should not issue new loans referencing USD LIBOR, even though USD LIBOR for most tenors will continue to be published until 30 June 2023.

As the New York Federal Reserve's Alternative Reference Rates Committee ("ARRC") allows market participants to choose between various alternative rates, there is currently no consistency in the approach of ship finance lenders. Furthermore, a few ship finance lenders and borrowers have still not selected their preferred alternative rate.

The purpose of this article is to explain the different alternatives for USD loans, with suggestions on when each rate may be more appropriate.

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