Majority in APAC still hope to move from LIBOR despite pandemic: poll

Three-fifths have have seen their transition plans grinding to a halt.

Three-fifths (60%) of market participants’ LIBOR transition plans have been hampered by the pandemic, but most still hope to switch to risk-free-rates (RFRs) by end-2021, according to a poll by the Asia Pacific Loan Market Association (APLMA) and Bloomberg.

More than one-thirds (36%) who have quantified their Libor exposures and are ready to execute their plans are on par with those who are only starting to build their plans (36%). Only one out of four (27%) have already started transitioning.

Asia’s exposure to Libor is significant, with more than $600b outstanding in USD-Libor linked loans and bonds maturing from 2022, said Bloomberg Asia Pacific head Bing Li.

In addition, 44% agree that the top challenge when facing an RFR world is agreeing on conventions, whilst almost 30% viewed availability and consistency of systems across vendors and institutions as the main hindrance.

Others argued that they needed more consistency on methodologies to calculate compounded interest in arrears, followed by more guidance and information from local regulators, education and understanding of the impact of the transition and more information on amending legacy transactions.