Refinitiv Publishes Forward-Looking Term Rate Versions of USD IBOR Cash Fallbacks

Refinitiv commences publication of forward-looking term rate versions of its ARRC recommended fallback rates - USD IBOR Cash Fallbacks. This follows the Alternative Reference Rates Committee's (ARRC) March 2021 announcement that it had selected Refinitiv to publish its recommended fallback rates for cash products, and Refinitiv's July 2022 announcement that it intends to launch the new USD IBOR Cash Fallbacks settings in September 2022.

There are trillions of dollars of cash products such as loans, bonds and securitized products that reference LIBOR and mature after June 30, 2023, which will use the ARRC's recommended fallback rates. USD IBOR Cash Fallbacks help these legacy contracts to smoothly transition away from USD LIBOR and provide market participants, including lenders and borrowers, with an industry standard agreed rate, which can clearly and easily be referenced in contracts.

These new forward-looking term rate versions of USD IBOR Cash Fallbacks are based upon CME Term SOFR plus the ARRC's recommended spread adjustments. They support institutional cash products and consumer cash products and are available as all-in spread adjusted rates in 1-month, 3-month 6-month and 12-month tenors. The institutional versions are available today as production benchmarks and the consumer versions are available as prototype rates with the intention that these rates will enter production immediately following June 30, 2023, when the ARRC's recommended spread-adjustments for consumer products will be officially set.

Jacob Rank-Broadley, Head of LIBOR Transition, Benchmarks & Indices at Refinitiv, said:"With forward-looking term rate versions of Refinitiv USD IBOR Cash Fallbacks now available, market participants have an easy-to-use replacement benchmark that can be used in their legacy LIBOR contracts."

Tom Wipf, ARRC Chairman and Vice Chairman of Institutional Securities at Morgan Stanley, said:"With the end of U.S. dollar LIBOR's publication nearly upon us, it is critical to smoothly transition legacy contracts that will mature after then. Refinitiv's publication of these ARRC-recommended fallback rates supports market participants in this effort by equipping them with an important tool that can be readily referenced in legacy cash products."