Refinitiv Introduces USD IBOR Institutional Cash Fallbacks to Facilitate Industry Transition from USD LIBOR

Refinitiv, one of the world's largest providers of financial markets data and infrastructure, announced on Tuesday the introduction of USD IBOR Institutional Cash Fallbacks, alongside USD IBOR Consumer Cash Fallbacks 1-week and 2-month settings expected to launch on January 3, 2022, pending Refinitiv Benchmark Services (UK) Limited board approval.

Refinitiv USD IBOR Institutional Cash Fallbacks are now available for use in financial and nonfinancial corporate contracts and include a number of different versions. The adjusted Secured Overnight Financing Rate (SOFR) component includes SOFR compounded in arrears, daily simple SOFR and SOFR compounded in advance. Each of the SOFR compounded in arrears and daily simple SOFR rates are available with and without a lookback, observational shift, and lockout. Added to this is a static spread adjustment. Refinitiv USD IBOR Institutional Cash Fallbacks are published in up to 7 tenors including overnight, 1-week, 1-month, 2-month, 3-month, 6-month and 12-month.

"The introduction of production Refinitiv USD IBOR Institutional Cash Fallbacks can support trillions of dollars of legacy cash contracts to smoothly transition away from USD LIBOR. These rates provide the industry with an efficient solution that reduces the operational burden on market participants and protects legacy contracts once LIBOR is no longer available," said Jacob Rank-Broadley, Head of LIBOR Transition, Benchmarks & Indices at Refinitiv.

LIBOR underpins hundreds of trillions of dollars of financial instruments and contracts, making it one of the most widely used benchmarks in the world. The Financial Conduct Authority (FCA), the regulator of LIBOR, announced On March 5, 2021, the dates that panel bank submissions for all LIBOR settings will cease​, after which representative LIBOR rates will no longer be available.