Libor limbo: loan market fallback language upends lenders

Banks seek to replace painful fallback language in loan docs and avoid a cost-of-funds contingency

Risk 0220 In depth Mark Long NB illustration
Mark Long,

For lenders across Europe, the Middle East and Africa, the loss of Libor reference rates could have punishing consequences.

In standard Loan Market Association (LMA) loan documents, the cost of funds – the rate at which banks fund themselves – is the rate to which contracts default: the fallback rate. Envisaged as a stopgap contingency, not a longer-term transition, the cost-of-funds fallback invites a host of confidentiality and commercial issues for banks. For non-traditional lenders – and

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact or view our subscription options here:

You are currently unable to copy this content. Please contact to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to View our subscription options

You need to sign in to use this feature. If you don’t have a account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here