BMR and LIBOR reform
The replacement of LIBOR with an alternative interest reference rate marks a significant change that will have an impact on all participants in financial and capital markets globally. This undertaking includes various aspects: alternative benchmarks must be widely accepted by participants; company IT systems need to be adjusted and tested; existing contracts and agreements based on LIBOR must be amended.
What does the benchmark reform mean for DEG customers' current LIBOR transactions?
The interest rate benchmark reform will take effect on the debt products and services in USD that are provided to DEG customers. All loan contracts bearing a floating interest rate in USD with a remaining term exceeding 30 June 2023 and interest rate adjustments after 30 June 2023 will need to be adapted to the new benchmark rate. Alternatively, DEG recommends to convert the floating interest scheme of the respective loan into a fixed rate for the remaining term of the contract.
As the transition progresses, we will provide further information to our customers in a timely manner. In the meantime, we invite to watch the recorded webinar organised for our customers together with our partners FMO and Proparco, which took place in October 2021: LIBOR SOFR Transition Webinar 2021 - YouTube
Additionally, we have prepared frequently asked questions: FAQs
For additional details on market guidance and the LIBOR transition process, please visit the website of ARRC
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