This is the third in our series of briefings examining the implications of LIBOR cessation for aviation transactions. Since summer 2020 and in the midst of the ongoing Coronavirus pandemic, there has been considerable and laudable progress by regulators, national working groups and institutions on LIBOR transition and broader global benchmark reform. The ARRC's recommendation that USD LIBOR is replaced by SOFR brings some welcome clarity for the industry, given that most cross-border aircraft transactions are USD denominated. However, remaining uncertainties and divergence between products and markets mean that the work to ensure a smooth and balanced transition for commercial parties is only just beginning.
This briefing summarises aspects which we consider crucial for industry participants to address in their internal planning, documentary due diligence and negotiations with counterparties.