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ISDA released the final results of its consultation concerning pre-cessation issues for certain interbank offered rates ("IBORs").
As previously covered, ISDA launched the "Pre-Cessation Consultation" in May 2019. ISDA requested feedback on whether its contemplated fallback amendments to certain floating rate options that reference an IBOR should include a fallback trigger.
In the summary of the results, ISDA found, among other things, that most respondents recommended creating a "uniform" transition to fallback rates throughout products and currencies. Consistent with preliminary results released by ISDA earlier this year, ISDA found that market participants expressed a wide variety of views and opinions regarding whether and how to implement a pre-cessation trigger. No opinion or view was expressed by a majority of the respondents. On implementing a pre-cessation trigger, respondents identified several concerns, including (i) potential inappropriate value transfer, (ii) litigation risk and (iii) operational challenges.
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