LIBOR’s decommissioning is a growing concern for companies who have yet to think about their transition strategy. With the replacement of LIBOR set to go into effect at the end of 2021, companies are forced to assess changes to their investments, loans, hedges, contracts and other potential exposure points.
CFO Dive covered Duff & Phelps recent webinar on the LIBOR transition where our experts covered key considerations, including expensive exposure, financial modeling and governance. Rich Vestuto, Managing Director in the Legal Management Consulting practice, discussed finding and replacing LIBOR references stating, “large enterprise or small, a lot of the time they’re not even aware of where all the contracts are and who’s in control of them.”
Marcus Morton, Managing Director in the Valuation Advisory Services practice, touched on the financial modelling aspect of the LIBOR transition, stating that, “valuation and risk models potentially will need changing to take into account new conventions involved in the rates.”
With regards to good governance, Mark Turner, Managing Director in the Compliance and Regulatory Consulting practice, highlighted the essential role proactive communication plays among firms and counterparties. Mark states, “Firms shouldn’t sit back and wait, and if they’re not getting communications, assume they’re clear from counterparties and lenders.”
Through our Valuation Advisory Services, Compliance and Regulatory Consulting, Legal Management Consulting and Disputes Consulting teams, Duff & Phelps is able to provide end-to-end support during the entire LIBOR transition process. Our experts urge organizations to be proactive about the transition in order to account for all possible exposure points. Read more about our LIBOR transition advisory services.
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