The Longest Goodbye: Life After LIBOR
August 17, 2021
Read Time 1 MIN
While meme stocks, crypto and the ongoing inflation debate have received a lot of headlines this year, the ongoing work to replace the London Interbank Offering Rate (LIBOR), a benchmark interest rate, has continued largely behind the scenes. This effort, which began almost a decade ago, touches nearly every corner of the global capital markets. Teams of lawyers, bankers, back and middle office professionals, regulators and other market participants are working full-time around the globe on this massive undertaking.
The aggregate dollar value of exposures (estimated to be around $350 trillion1) is so large that the transition away from LIBOR could be a potential risk to global financial stability, according to regulators. With its many nuances and uncertainties, the end of LIBOR remains absent from many investors’ radars. However, we expect that to change as the transition approaches. This review intends to:
- Provide background on why the transition is happening
- Give key dates that investors should be aware of
- Lay out the post-LIBOR landscape
- Focus on how floating rate note investors may be impacted
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DISCLOSURES:
1 Source: Credit Suisse
Please note that VanEck may offer investments products that invest in the asset class(es) or industries included herein.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information herein represents the opinion of the author(s), but not necessarily those of VanEck, and these opinions may change at any time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.
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DISCLOSURES:
1 Source: Credit Suisse
Please note that VanEck may offer investments products that invest in the asset class(es) or industries included herein.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information herein represents the opinion of the author(s), but not necessarily those of VanEck, and these opinions may change at any time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed. Not intended to be a forecast of future events, a guarantee of future results or investment advice. Historical performance is not indicative of future results. Current data may differ from data quoted. Any graphs shown herein are for illustrative purposes only.
All investing is subject to risk, including the possible loss of the money you invest. As with any investment strategy, there is no guarantee that investment objectives will be met and investors may lose money. Diversification does not ensure a profit or protect against a loss in a declining market. Past performance is no guarantee of future results.