For years, the London Interbank Offered Rate (LIBOR), the reference rate for unsecured short-term borrowing in the interbank market, has served as a global benchmark for the pricing of floating-rate corporate loans, among other financial contracts. The Financial Conduct Authority of the United Kingdom has begun the LIBOR transition to phase out LIBOR, and the publication of the five remaining US Dollar rates will cease after 30 June 2023.
For US Dollar denominated debt, there is an ongoing transition towards an alternative reference rate – the Secured Overnight Financing Rate (SOFR). This is particularly significant for Pakistani Independent Power Producers (IPPs) that have executed LIBOR-based foreign currency loan agreements extending beyond June 2023 with international lenders.
RIAA Barker Gillette – Pakistan, with the support of Fieldfisher Capital LLC, is advising on the implications of the phase-out, alternatives to the LIBOR benchmark and on the legal, regulatory and other measures required to be undertaken by the IPPs, relevant Government of Pakistan entities and foreign lenders.
The transition is also significant for many other Pakistani businesses that have LIBOR-based US dollar-denominated debt with a tenor extending beyond June 2023.
Our team advising the IPPs on this matter comprises Hasnain Naqvee (Senior Partner-Pakistan) and Sana K. Tirmizey (Associate).
For further details on the LIBOR transition, please visit https://www.brecorder.com/news/40145382
