LIBOR transition: the LMA’s new compounded RFR facilities agreements

On 23 September 2019, the Loan Market Association (the “LMA”) published two new draft facilities agreements under which interest is calculated by reference to backward-looking compounded risk-free rates (“RFRs”).

The drafts comprise a compounded SONIA based sterling term and revolving facilities agreement and a compounded SOFR based dollar term and revolving facilities agreement. These are the first LMA facilities agreements not to include a forward-looking term rate, such as LIBOR, in calculating interest for a term or revolving facility. The drafts have been published as part of ongoing efforts underway in the loan markets (and more widely) to transition away from LIBOR to alternative benchmarks.

Read our full publication - LIBOR transition: the LMA’s new compounded RFR facilities agreements - for further information.