U.S. Securitization Faces Up to Post-Libor Legacy Problem
Financial services attorney Douglas Youngman was interviewed by GlobalCapital about the legislative push to finalize the U.S. securitization market's Libor transition. The "game changing" rules will govern the choice of successor benchmarks for legacy deals that contain no provision for alternatives to the scandal-hit rate that will start to be switched off from January. However, legacy deals - those so old they make no provision for an alternative benchmark rate - are proving a thornier problem to fix.
"The market is rapidly moving towards the regulators' firm cut-off date," Mr. Youngman said. "We have seen a recent uptick in deals starting out with a Sofr rate, even in product areas that had lagged behind before."