Contributed By MMC Africa Law
The key consequences of the expiry of LIBOR in 2021 will be as follows:
In order to manage the risk associated with expiration of LIBOR in the US, the Federal Reserve has tasked the Alternative Reference Rate Committee (ARRC) to be responsible for the transition from LIBOR to a new benchmark rate called the Broad Treasury Financing Rate (BTFR). The BTFR rate contains a broad set of US treasury market-based financing transactions.
The BTFR rate will run in parallel with LIBOR for several years in order to help determine a fair compensating credit spread between LIBOR and BTFR for those financial assets that will be affected.
Except for external debt most borrowing in Kenya is however governed by the Central Bank Rate that is published by the Central Bank of Kenya.