The likely replacement of the LIBOR at the end of 2021 creates difficult technical and practical issues for all sectors of business and finance. The concerns intensify as the projected deadline grows closer against a background of some continuing uncertainty and lack of consensus about the details of the approach to take. Some recent developments are worth noting and putting in context for the shipping industry and ship financiers. There are issues both for loans now being documented – and also for all LIBOR-based deals likely to continue beyond 2021.
Looking at new loans first, what are the options? (Some of the key terms and abbreviations are set out in the glossary at the end.)