COVID-19 has driven anxiety over the LIBOR transition right off almost everyone’s top-of-mind list and yet the crisis is taking no notice of that lack of regard and soldiering on. The ARRC continues to beaver away, generating guidance and advice and otherwise proselytizing the need to get on with it and be ready for transition on January 1, 2022.
But are the markets listening? Look at our ardor! Except for special situations, the use of SOFR, to date, has been a political and not an economic decision for those who have elected to use it. There is little take-up in the real world and little enthusiasm for doing so. And what’s with the huge whoops a few weeks ago when SOFR’s March to the Sea was interrupted when the Fed backed off using SOFR in the Fed’s new $6 billion aid program for small and mid-size businesses? Run away! Run away! Back to LIBOR!