Swaps users face potential margin bill for Libor transition

New margin rules could snare legacy trades amended to reference alternative rates, lawyers warn

payments-chart
Any inability to grandfather amended trades could prove "very costly" for market participants

Amending existing Libor-linked derivatives contracts to reference a different benchmark could bring the trades into scope for the new non-cleared margin rules and create significant funding costs for market participants, lawyers have warned. That would make transitioning legacy portfolios difficult without some kind of carve-out, they say.

Since 2013, regulators have overseen efforts to move the swaps market away from relying solely on Libor, and a number of industry working groups are

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Risk.net? View our subscription options

Register

Want to know what’s included in our free membership? Click here

This address will be used to create your account

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here