Banks given conflicting guidance on Libor loan facilities

Some banks have been told they can continue to honour uncommitted dollar Libor lines in 2022

US regulators have given lenders conflicting guidance on whether clients can continue to draw on uncommitted Libor facilities after the December 31 deadline to stop new lending using the outgoing benchmark.

The ambiguity stems from whether advances on uncommitted lines – where lenders have discretion over credit availability – count as new loans or the continuation of an existing facility.

“There is some lack of clarity around what new use actually means” in relation to uncommitted facilities