235,900: This figure represents the number of contracts in the UK that have yet to transition from reliance on London Interbank Offered Rates (LIBOR) to the new Sterling Overnight Index Average, or SONIA, according to January 2022 data from the Financial Conduct Authority (FCA). These contracts include interest-rate derivatives, bonds, securitisations, loans, mortgages and other products. They represent £472 billion in value, per the FCA.
In June 2021, Wilmington Trust convened a panel of experts from Alston & Bird LLP and Marston’s PLC to discuss the LIBOR transition. The panelists discussed the impact of the changes as seen in the market together with the various strategies firms are implementing to work towards the deadline of a December 31, 2021 implementation.
Progress in LIBOR transition continues to unfold, with cessation dates of December 31, 2021 in the UK and June 30, 2023 in the U.S. Those dates are now are extremely unlikely to move given the latest announcements from the UK’s FCA (for a guide to acronyms used in this article, see below) and ICE. Simply put, SOFR and SONIA are rapidly coming into force.Progress on USD LIBOR in recent months has included ARRC recommendations around hardwired fallback provisions and triggers.