Roger S. Chari – Page 3 – Duane Morris Banking and Finance Law

October 9, 2020 by Roger S. Chari

LIBOR Transition: Time Marches on for Non-Bank Lenders and Asset Managers

Tick-tock. No, not the controversial social networking platform. That’s the sound of time slipping away on the existence of LIBOR. Regulated bank lenders are at varying stages in their transition to a new interest rate, with some even testing the waters originating new loans bearing interest based on SOFR. Non-bank lenders and asset managers are no less subject to the phase out of LIBOR, but for many the transition process is not quite so far along.

For those who missed it, our new partner, Anastasia Kaup, wrote an informative Alert outlining some of the developments in LIBOR transition over the summer and some of the developments yet to come. Since the summer, at least one syndicated loan has reportedly been originated using the ARRC recommended hardwired approach. However, it remains to be seen whether the rest of the market will follow or stick with the amendment approach and simply go straight to SOFR amendments. It’s still a bit early for SOFR amendments, but the LSTA is working on a sample for the syndicated loan market based on a form that Duane Morris developed. Our Alert highlights some of the LIBOR transition issues for non-bank lenders and asset managers to consider as we march towards the end of the year.

Duane Morris’ LIBOR Transition Team: Roger S. Chari, Chair, Joel N. Ephross, Amelia (Amy) H. Huskins, Phuong (Michelle) Ngo, and Han Wang.

August 31, 2020 by Roger S. Chari

To Hardwire or Not to Hardwire?

The question is not nearly as existential as the question phrased by William Shakespeare, but it is a significant one in the lending world as the transition from LIBOR to SOFR ideally happens by the middle of next year. The official answer is easy—hardwired LIBOR transition language is recommended by the ARRC for syndicated loans and bilateral loans. For diligent lenders, adopting hardwired language is part of a proactive approach to addressing the LIBOR transition process. By setting the broad parameters of the new rate up front now, the ultimate details of implementing the new rate can be simplified with a notice to the borrower rather than negotiating an amendment in the future when time is short. Our prior Alert discusses the hardwired approach in more detail.

Still, for some lenders there are solid reasons to adopt a wait and see approach and possibly skip the hardwired language. These lenders are no less diligent in their desire to do the right thing, but the developments in the LIBOR/SOFR transition are starting to accelerate, with major details still unsettled at this point. Determining how the broad market will handle the transition and keeping a lender’s actions in line with the market without getting ahead of the developments may suggest a more cautious approach.

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July 24, 2020May 5, 2021 by Roger S. Chari

ARRC Pumps Up the Summer Heat on LIBOR Transition

While the COVID-19 pandemic has taken center stage the past few months, the transition away from LIBOR has been continuing in the background, almost unnoticed at times. Some market participants have questioned whether the disruption caused by COVID-19 will delay the LIBOR transition process. The proposed timelines have stretched a bit, but regulatory authorities have been adamant that the December 31, 2021 deadline remains firm.

Earlier this month, the Alternative Reference Rates Committee of the New York Federal Reserve (ARRC) began a full court press to make the case for transitioning to SOFR and guide market participants to that goal. Tom Wipf, the chair of the ARRC, spoke at webinars hosted by the Loan Syndications & Trading Association (LSTA) and the International Swaps and Derivatives Association (ISDA). The ARRC also kicked off a SOFR Summer Series of webinars open to the public. The speakers include many top officials and industry leaders, and their insight is invaluable. There are also lively questions and answers from the moderator and the internet audience.

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May 27, 2020June 11, 2020 by Roger S. Chari

Remote Notarization as States Reopen

As states reopen in stages, we thought it would be a good time to update our 50-state chart on remote notarization.

In our original Alert, we noted that at the start of the shutdowns, some states already had remote notarization procedures in place; some states that didn’t have procedures quickly adopted stopgap measures to facilitate transactions during the crisis and others failed to address the issue. As the pandemic progressed, many of these states ultimately adopted emergency statutes and orders, and others still did not take action.

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