Interest rates

ICE Benchmark Administration launches GBP SONIA ICE Swap Rate as a benchmark for use by licensees

Retrieved on: 
Tuesday, December 15, 2020
Banking, Professional services, Finance, Swaps, Money, Interest rates, Finance, Economy, Interest rate swap, Swap rate, Libor, Sonia, Constant maturity swap, ICE Benchmark Administration, Intercontinental Exchange, SONIA

GBP SONIA ICE Swap Rate benchmark settings are determined using the published ICE Swap Rate Waterfall methodology using eligible input data in respect of SONIA interest rate swaps, and are available for the same tenors and at the same time as the current GBP LIBOR ICE Swap Rate.

Key Points: 
  • GBP SONIA ICE Swap Rate benchmark settings are determined using the published ICE Swap Rate Waterfall methodology using eligible input data in respect of SONIA interest rate swaps, and are available for the same tenors and at the same time as the current GBP LIBOR ICE Swap Rate.
  • The launch of the GBP SONIA ICE Swap Rate benchmark follows a positive market response to feedback and consultation papers issued by IBA, and the successful publication of GBP SONIA ICE Swap Rate settings on an indicative Beta basis since October 2020 .
  • IBA reserves all rights in the ICE Swap Rate methodology, and in the ICE Swap Rate and GBP SONIA ICE SWAP Rate settings.
  • ICE Swap Rate, ICE LIBOR, LIBOR and ICE Benchmark Administration are registered trademarks of IBA and/or its affiliates.

GFL Environmental Prices Offering of Senior Secured Notes

Retrieved on: 
Tuesday, December 15, 2020
Money, Finance, Interest rates, Financial services, GFL Environmental, Libor

VAUGHAN, ON, Dec. 15, 2020 /PRNewswire/ -GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL" or the "Company") today announced the pricing of US$750.0 million in aggregate principal amount of 3.500% senior secured notes due 2028 (the "Notes").

Key Points: 
  • VAUGHAN, ON, Dec. 15, 2020 /PRNewswire/ -GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL" or the "Company") today announced the pricing of US$750.0 million in aggregate principal amount of 3.500% senior secured notes due 2028 (the "Notes").
  • GFL intends to use the net proceeds from the offering of the Notes (the "Notes Offering") to repay a portion of amounts outstanding under the Company's term loan facility, which matures on May 31, 2025, and to pay related fees and expenses.
  • GFL also announced today that it expects to complete substantially concurrently with the closing of the Notes Offering, a repricing of the balance of the term loan facility not otherwise repaid with the proceeds of the Notes Offering, representing approximately US$1.31 billion, by reducing the LIBOR floor from 1.00% to 0.50%.
  • Due to the demand for the repricing of the term loan facility, the Company elected to reduce the original size of the Notes Offering.

Isabel Schnabel: Welcome address

Retrieved on: 
Tuesday, December 15, 2020
Interest rates, Money, Finance, Financial services, Eurozone, Banking, Eonia, Euribor, Derivative, Euro, €STR

SPEECHWelcome addressWelcome address by Isabel Schnabel, Member of the Executive Board of the ECB, at the third roundtable on euro risk-free rates Frankfurt am Main, 14 December 2020 Good afternoon and welcome to the third roundtable of the industry working group on euro risk-free rates.

Key Points: 


SPEECH

Welcome address

    Welcome address by Isabel Schnabel, Member of the Executive Board of the ECB, at the third roundtable on euro risk-free rates

      • Frankfurt am Main, 14 December 2020 Good afternoon and welcome to the third roundtable of the industry working group on euro risk-free rates.
      • Not least, it has forced us to transition to virtual modes of working.
      • I very much hope that the public health situation will soon allow us to meet again in person.
      • Todays roundtable will provide a platform to exchange views on the development of robust fallback provisions for EURIBOR, which remains a systemically relevant benchmark.

    The motivation for robust EURIBOR fallback provisions

      • As a result, EURIBOR is still used extensively in both new and legacy contracts for cash and derivatives products.
      • Given that EURIBOR remains operational, why do we even need to discuss fallback arrangements?
      • If the benchmark rate ceased to exist, the absence of a fallback rate would expose the counterparties to substantial risk.
      • Fallback provisions therefore act as seatbelts for contractual arrangements in financial markets.
      • In fact, there is already a legal requirement to use fallback provisions.
      • In addition to these legal requirements, there is also a clear financial stability justification to ensure there are workable fallback provisions that reduce contractual uncertainties in the event of EURIBOR ceasing to exist.

    Public consultations: the role of the €STR as a fallback rate

      • However, this basic premise begs a more difficult question: what are feasible alternative rates that can be used if a fallback scenario is triggered?
      • In an effort to address this question, the working group has recently launched two public consultations.
      • The public consultations build on a common theme, namely the use of the ECBs STR in the proposed fallback measures.
      • For the public consultation, the working group has used two alternative STR-based approaches to approximate a term rate that could serve as a fallback.
      • Second, the working group has used realised values of the STR and compounded them over the interest period, thus deriving a backward-looking term rate.
      • The STR is a suitable rate for use in EURIBOR fallback arrangements.

    Discontinuation of EONIA: the urgent need for a rate transition

      • As EONIA has been converted into a STR tracker rate, the benefits of switching to the STR may not be immediately obvious.
      • There are two reasons why market participants should urgently work on their preparedness for an orderly transition from EONIA to the STR.
      • First, the discontinuation of EONIA is imminent, with its last publication scheduled for 3 January 2022.
      • If the proposed fallback provisions were ever activated, the market would have to rely extensively on the STR.
      • The ECB will continue to facilitate the replacement of EONIA in euro area markets by maintaining a robust and representative STR.

    Conclusion

      • The STR is an ideal candidate for this transition.
      • It can support market participants in building robust fallback procedures for a potential discontinuation of EURIBOR.
      • Users should therefore swiftly replace EONIA and make wider use of the STR in cash and derivatives markets.
      • I would also like to thank the ECB team that has been supporting the working group by providing the secretariat.
      • I now wish all of you an insightful and productive roundtable.

    Steven Maijoor speaks at the third roundtable on euro risk-free rates

    Retrieved on: 
    Tuesday, December 15, 2020
    Money, Finance, Interest rates, Eurozone, Financial markets, Euribor, European Union, Futures contract, European Securities and Markets Authority

    The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, today delivereda speech at the third roundtable on euro risk-free rates.

    Key Points: 
    • The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, today delivereda speech at the third roundtable on euro risk-free rates.
    • The focus of the event wasthe fallbacks for EURIBOR, where working group on euro risk-free rates members will guide the audience through the recently launched public consultations on EURIBOR fallback trigger events and STR-based EURIBOR fallback rates.

    Isabel Schnabel: Welcome address

    Retrieved on: 
    Tuesday, December 15, 2020
    Interest rates, Money, Finance, Financial services, Eurozone, Banking, Eonia, Euribor, Derivative, Euro, €STR

    SPEECHWelcome addressWelcome address by Isabel Schnabel, Member of the Executive Board of the ECB, at the third roundtable on euro risk-free rates Frankfurt am Main, 14 December 2020 Good afternoon and welcome to the third roundtable of the industry working group on euro risk-free rates.

    Key Points: 


    SPEECH

    Welcome address

      Welcome address by Isabel Schnabel, Member of the Executive Board of the ECB, at the third roundtable on euro risk-free rates

        • Frankfurt am Main, 14 December 2020 Good afternoon and welcome to the third roundtable of the industry working group on euro risk-free rates.
        • Not least, it has forced us to transition to virtual modes of working.
        • I very much hope that the public health situation will soon allow us to meet again in person.
        • Todays roundtable will provide a platform to exchange views on the development of robust fallback provisions for EURIBOR, which remains a systemically relevant benchmark.

      The motivation for robust EURIBOR fallback provisions

        • As a result, EURIBOR is still used extensively in both new and legacy contracts for cash and derivatives products.
        • Given that EURIBOR remains operational, why do we even need to discuss fallback arrangements?
        • If the benchmark rate ceased to exist, the absence of a fallback rate would expose the counterparties to substantial risk.
        • Fallback provisions therefore act as seatbelts for contractual arrangements in financial markets.
        • In fact, there is already a legal requirement to use fallback provisions.
        • In addition to these legal requirements, there is also a clear financial stability justification to ensure there are workable fallback provisions that reduce contractual uncertainties in the event of EURIBOR ceasing to exist.

      Public consultations: the role of the €STR as a fallback rate

        • However, this basic premise begs a more difficult question: what are feasible alternative rates that can be used if a fallback scenario is triggered?
        • In an effort to address this question, the working group has recently launched two public consultations.
        • The public consultations build on a common theme, namely the use of the ECBs STR in the proposed fallback measures.
        • For the public consultation, the working group has used two alternative STR-based approaches to approximate a term rate that could serve as a fallback.
        • Second, the working group has used realised values of the STR and compounded them over the interest period, thus deriving a backward-looking term rate.
        • The STR is a suitable rate for use in EURIBOR fallback arrangements.

      Discontinuation of EONIA: the urgent need for a rate transition

        • As EONIA has been converted into a STR tracker rate, the benefits of switching to the STR may not be immediately obvious.
        • There are two reasons why market participants should urgently work on their preparedness for an orderly transition from EONIA to the STR.
        • First, the discontinuation of EONIA is imminent, with its last publication scheduled for 3 January 2022.
        • If the proposed fallback provisions were ever activated, the market would have to rely extensively on the STR.
        • The ECB will continue to facilitate the replacement of EONIA in euro area markets by maintaining a robust and representative STR.

      Conclusion

        • The STR is an ideal candidate for this transition.
        • It can support market participants in building robust fallback procedures for a potential discontinuation of EURIBOR.
        • Users should therefore swiftly replace EONIA and make wider use of the STR in cash and derivatives markets.
        • I would also like to thank the ECB team that has been supporting the working group by providing the secretariat.
        • I now wish all of you an insightful and productive roundtable.

      Steven Maijoor speaks at the third roundtable on euro risk-free rates

      Retrieved on: 
      Tuesday, December 15, 2020
      Money, Finance, Interest rates, Eurozone, Financial markets, Euribor, European Union, Futures contract, European Securities and Markets Authority

      The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, today delivereda speech at the third roundtable on euro risk-free rates.

      Key Points: 
      • The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, today delivereda speech at the third roundtable on euro risk-free rates.
      • The focus of the event wasthe fallbacks for EURIBOR, where working group on euro risk-free rates members will guide the audience through the recently launched public consultations on EURIBOR fallback trigger events and STR-based EURIBOR fallback rates.

      KBRA Assigns Preliminary Ratings to ONYP 2020-1NYP

      Retrieved on: 
      Monday, December 14, 2020
      Banking, Professional services, Insurance, Finance, Money, Finance, Economy, United States housing bubble, Banking, Interest rates, Structured finance, Mortgage-backed security, Commercial mortgage-backed security, Securitization, Floating interest rate, Bond

      Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to six classes of ONYP 2020-1NYP, a CMBS single-borrower securitization.

      Key Points: 
      • Kroll Bond Rating Agency (KBRA) announces the assignment of preliminary ratings to six classes of ONYP 2020-1NYP, a CMBS single-borrower securitization.
      • The floating rate loan has an initial two-year term with three, one-year extension options, and requires monthly interest-only payments based on one-month LIBOR.
      • The results of our analysis yielded a KBRA net cash flow (KNCF) of approximately $92.1 million.
      • To value the property, we applied a capitalization rate of 6.75% to arrive at a KBRA value of approximately $1.4 billion.

      Council endorses new rules addressing cessation of financial benchmarks

      Retrieved on: 
      Thursday, December 10, 2020
      Money, Finance, Interest rates, Financial services, Banking, Benchmark, Libor, European Union law

      LIBOR reference rates and other major benchmarks are widely used as references in a large variety of contracts and financial instruments.

      Key Points: 
      • LIBOR reference rates and other major benchmarks are widely used as references in a large variety of contracts and financial instruments.
      • Mandatory replacement of benchmarks, including by EU legislation

        The new rules give the Commission the power to replace so-called 'critical benchmarks', which could affect the stability of financial markets in Europe, and other relevant benchmarks, if their termination would result in a significant disruption in the functioning of financial markets in the EU.

      • The Commission will also be able to replace third-country benchmarks if their cessation would result in a significant disruption in the functioning of financial markets or pose a systemic risk for the financial system in the EU.
      • Use of third-country benchmarks

        The Council and the Parliament have also extended the transition period to ensure a smooth transition to the new rules for the use of third-country benchmarks.

      Freddie Mac Announces First K-Deal with SOFR Indexed Multifamily Mortgages

      Retrieved on: 
      Monday, December 7, 2020
      Finance, Money, Interest rates, Economy, Mortgage industry of the United States, United States housing bubble, Banking, Swaps, SOFR, Libor, Bond, Floating rate note

      K-F95 will also include classes of floating-rate bonds indexed to LIBOR and backed by underlying mortgages that are indexed to LIBOR.

      Key Points: 
      • K-F95 will also include classes of floating-rate bonds indexed to LIBOR and backed by underlying mortgages that are indexed to LIBOR.
      • Freddie Mac Multifamily began purchasing SOFR based floating rate mortgages in October 2020 and will cease all LIBOR-indexed loan purchases by the end of the year.
      • In December 2019, Freddie Mac priced K-F73 , which was the multifamily industrys first offering of SOFR-based bonds.
      • Freddie Mac Multifamily is a leading issuer of agency-guaranteed structured multifamily securities.

      ICE Benchmark Administration Publishes Consultation on Potential Cessation of LIBOR® Settings

      Retrieved on: 
      Friday, December 4, 2020
      Banking, Professional services, Finance, Money, Finance, Interest rates, Financial services, Banking, Libor, Swaps, United States housing bubble, Futures exchanges, New York Stock Exchange, Intercontinental Exchange, Benchmark, ICE Benchmark Administration, Intercontinental Exchange

      The consultation is open for feedback until 5:00 pm London time on January 25, 2021.

      Key Points: 
      • The consultation is open for feedback until 5:00 pm London time on January 25, 2021.
      • ICE Benchmark Administration is authorized and regulated by the Financial Conduct Authority for the regulated activity of administering a benchmark, and is authorized as a benchmark administrator under the EU Benchmarks Regulation.
      • ICE LIBOR, LIBOR and ICE Benchmark Administration are registered trademarks of IBA and/or its affiliates.
      • Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.