Don’t Be Floored by SOFR Interest Rate Floors

Read this article discussing interest rate floors for SOFR rate loans. Interest rate floors are a common tool by lenders in commercial loans to ensure that they will always earn a certain minimum yield on their loan. This article discusses how the floor transfers over to SOFR under LIBOR fallback provisions and how new credit agreements are including floors on SOFR loans.

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Related Content

• LIBOR Replacement Resource Kit
  Review this resource kit for an overview of replacing LIBOR as the benchmark interest rate in loan documents.

• Market Trends 2020/21: LIBOR Succession Clauses
  Read this practice note describing provisions in credit agreements that allow for a transition to a replacement reference interest rate upon the cessation of LIBOR. This practice note discusses current market trends in these fallback LIBOR clauses in publicly-filed credit agreements from the second half of 2020 and first half of 2021.

• The Client Asks: What Happens When LIBOR Ends?
  Check out this practice note describing how you should proceed when your client calls and asks what happens to their loan documents after the end of LIBOR.

Practical Guidance Updates

Featuring the latest updates from your Practical Guidance account.

• Market Standards—Finance
• LIBOR Transition Video
  This video highlights the transition of LIBOR clauses in credit agreements and its implications in the market. 
• Ukraine Invasion Resource Kit
• The Practical Guidance Journal Spring 2022 Edition features updates related to LIBOR replacement and SOFR.
• Check out the new Practical Guidance Author Center! Learn about the 1500+ leading attorney authors contributing to our 20 practice areas, and find out how you can Become a Practical Guidance Author.
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