Hit the Mark with These Benchmark Interest Rate Replacement Clauses

Interest rate replacement clauses became very important in the transition from LIBOR to Term SOFR. Now that Term SOFR has become the prevalent benchmark interest rate, the benchmark replacement provisions have adjusted to cover the contingency of Term SOFR or the then-current benchmark becoming unavailable. These clauses specify what happens once the administrative agent is no longer able to ascertain the benchmark interest rate.

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Related Content

• Benchmark Interest Rate Replacement Clause (Amendment) (Credit Agreement)
  Use this benchmark replacement clause to provide for a replacement interest rate in the event the current benchmark rate becomes unavailable or ceases. This benchmark replacement clause takes an amendment approach to adopting the replacement rate.

• Benchmark Interest Rate Replacement Clause (Hardwired) (Bilateral Credit Agreement)
  This benchmark replacement clauses are used in a credit agreement to provide for a replacement interest rate if the current benchmark rate becomes unavailable or ceases. This benchmark replacement clause takes a hardwired approach and is meant to be used in a bilateral credit agreement.

• Interest Rate Provisions in Credit Agreements (SOFR)
  Read this practice note describing the two pricing options frequently included in syndicated credit agreements—one based on the base rate and the other based on SOFR.

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