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by sethbc
1608 days ago
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Not quite - legally it's whatever is in the agreement and those have been (and still will be) subject to negotiation. In credit agreements without replacement language (e.g., pre 2018 agreements), a Borrower may very well be forced to borrower in prime, for instance. What you're talking about is the credit spread adjustments from the ARRC formulation of the LIBOR replacement language (11.448 bps for 1 month, 26.161 bps for 3 months and 42.826 bps for 6 months) [0]. In reality, the credit spread adjustments for Term SOFR are still moving and the market has been all over the place - I've seen 10/15/25 bps at 1mo/3mo/6mo tenors (the most common formulation in the leveraged space right now) or a 10 bps flat adjustment (generally viewed as aggressive). [0] https://www.newyorkfed.org/medialibrary/Microsites/arrc/file... |
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