Debtwire/SRS Acquiom Study: Hedge Funds Largely Prepared for LIBOR’s End; SOFR the Likely Replacement Rate

The transition away from the London Interbank Offered Rate (LIBOR) is rapidly approaching. Reporting of all non‑U.S. currency rates and U.S. dollar (USD) one‑week and two‑month rates will cease this quarter, with reporting of all remaining USD rates ending over the next two years. In the second quarter of 2021, Debtwire, in cooperation with SRS Acquiom, interviewed 100 U.S. executives from hedge funds, investment banks, direct lending funds and distressed debt funds to gauge their firms’ preparedness for the LIBOR transition. The study found most respondents to be well-prepared for the transition and a strong preference for use of the Secured Overnight Financing Rate as the replacement for LIBOR. This article discusses the survey report, with insights from Anne E. Beaumont, partner at Friedman Kaplan Seiler & Adelman. For more from Beaumont on the LIBOR transition, see “How Advisers Can Prepare for OCIE Exams on the Transition From LIBOR” (Jul. 9, 2020); and “The SEC Weighs In on LIBOR Transition” (Aug. 8, 2019).

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