Following recent announcements by regulators and commentary by working groups on the importance of completing the transition to risk-free rates (“RFR”s) by end of 2021 (or in some cases earlier), BAFT and ITFA issue this joint statement as an update to the Guidance Note published May 2020.
Given the importance of transitioning to risk-free rates by the end of 2021, BAFT together with the ITFA are issuing this joint LIBOR transition progress note addressing the transition’s impact on the BAFT Master Participation Agreement (MPA). This is a follow up to an initial note published in May 2020 which introduced the challenge and requested that BAFT MPA users refrain from developing their own language for LIBOR replacement. At that time, we provided high level disclaimer wording for use in marketing materials, etc. in order to avoid insertion of any institution specific wording in the MPAs to allow for maintaining the integrity of the document in the market.
Now we are pleased to share this latest update jointly drafted by ITFA and BAFT for the benefit of its respective members. This document addresses the impact of the LIBOR transition on the BAFT MPA, a broader update on the timing of the LIBOR transition and, lastly, some recommended next steps.
We will continue to work closely with ITFA on this matter and provide further updates as more clarity emerges.