IFLR Practice Insight
Morrison & Foerster partner Geoffrey R. Peck discusses the corporate sector’s slow awakening to regulators’ proposed phasing out of Libor in the IFLR Practice Insight article entitled, “Libor reform: corporates start asking questions.”
Peck said, “I’m concerned about large corporations with complicated treasury departments that have Libor in credit agreements, indentures, swaps and intercompany loans – yet I don’t see their CFOs doing much about it. Even some sophisticated companies haven’t yet grasped how complicated it is.”
“In the US especially, most alternative rates – including Sofr – are more expensive than even Libor, so from a treasury management perspective, it’s just not sensible to start paying a higher interest rate now,” added Peck.