Swiss loans may struggle with Libor transition, warn lawyers
Lack of standardisation means fallback clauses may be unable to handle move to Saron
Fallback provisions in legacy Swiss floating-rate loan contracts may not be robust enough to handle a move away from the Libor benchmark after 2021, lawyers have warned, which could see local courts decide whether the replacement rate is applicable on a case-by-case basis.
“My view is that those provisions will not be effective to address the switch to a new rate and would have to go back to general principles and move to the Swiss Code of Obligation,” said Thomas Werlen, a Swiss-based partner
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