FCA Encourages Market Participants to Continue Transition of Libor-linked Bonds

  • Source: fca.org.uk

Treliant Takeaway:

Treliant helps global banking institutions manage the transition away from LIBOR settings, which ended for Sterling, Swiss franc, Japanese yen, and euro on December 31, 2021. The transition continues for U.S. dollar LIBOR to its replacement rate Secured Overnight Financing Rate (SOFR) ahead of it’s cessation in mid-2023. Our consultant team has deep experience helping our global banking clients prepare for and manage the complexity of regulatory change.


On August 16, 2022 the FCA published a statement FCA encourages market participants to continue transition of LIBOR-linked bonds.  The statement strongly encourages issuers of the remaining LIBOR-linked bonds (or those that may have a future LIBOR-linked dependency) issued under English or other non-US laws which make consent solicitation practicable, to schedule consent solicitation processes for conversion to fair alternative rates e.g. relevant RFR plus the industry-agreed spreads.

Consent solicitation requires issuers to identify and locate investors, in order to communicate with them to solicit their approval for conversion to alternative rates.  This can be a complex and challenging process with issuers often finding it difficult to determine who investors are.