Commercial Loans When LIBOR
Is No More
By Todd A. Bickel
Telephone: 312.456.0192
The London Inter-Bank Offered Rate (LIBOR) is likely soon to become extinct. For decades, LIBOR indexes have been among the primary sources used by commercial lenders in floating rate loan transactions, but in 2017, the regulating body for LIBOR announced that its publication of those indexes may cease after December 2021. Since then, banks have been wrestling with how best to handle outstanding loans on their books which use LIBOR to determine the interest rate, and also how to price and document new loan transactions when both bankers and borrowers are accustomed to LIBOR-based interest rates.