The CBI sets out the key steps businesses need to take to prepare for the end of LIBOR and transition to alternative interest-rate benchmarks.
LIBOR, the common interest rate benchmark used in contracts, is ending. Businesses need to take action to check their exposure and speak to their lenders and advisers about transition.
LIBOR is the benchmark that lenders use to calculate the interest rate for financial products – it can also be found in other contracts. However, LIBOR is being replaced by a more transparent
benchmark called SONIA in the UK. Lenders will no longer be able to issue loans based on LIBOR from 1 April and new loans will need to reference a ‘risk free rate’ or an alternative non-LIBOR rate. Any existing contracts based on LIBOR will be switched to an alternate reference rate before 31 December 2021.
A change in interest rate could impact your business for existing loans and new financing. It is important you understand if and how this affects you. We know these are difficult times, with the pande
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