27th July 2020
Transition away from LIBOR
Since 2014 the UK authorities have been working to pursue the use of more robust interest rate benchmarks by laying the ground work for a successful market-led transition away from GBP LIBOR by the end of 2021. What this means for you is explained below.
Why is this necessary?
Regulators are concerned about the continued use of LIBOR. The UK’s Financial Conduct Authority (FCA) has determined that the method through which LIBOR is calculated does not comply with internationally accepted principles for robust interest rate benchmarks and it will cease requiring banks to submit the rates for LIBOR calculation after 31 December 2021.
What does this mean for you?
New lending products
This means that from now, all new lending products will be offered using the Bank of England base rate.
Existing lending facilities
Prior to the discontinuation of LIBOR in December 2021, switching to a new benchmark rate will be necessary for all existing lending facilities maturing after December 2021. This may result in changes to the amount payable under your facility.
Alpha Bank London Limited is working to keep customers informed throughout this transition and we will contact customers in due course with details on our proposed approach for the use of alternative benchmark interest rates. Please note that a final decision on which benchmark rate will be used to replace LIBOR will be taken once further guidance has been provided by regulators, the market and our advisors.
If you have any questions or feedback please do not hesitate to contact me on 0207 332 9228 or please contact your relationship manager.