LIBOR Index Replacement Rate Notices

The London Inter-Bank Offered Rate index was retired in June 2023. Issuers of securities that are currently using LIBOR (USD) to calculate their interest rates must choose and communicate a replacement rate to the investor community.

By working with the FRBNY Alternative Reference Rate Committee (ARRC) and other various industry, organizations, DTC compiled requirements to create a centralized process to disseminate benchmark replacement details through several different types of output, including the LENS repository, directly to the end investor.

The process collects, streamlines, and standardizes communication in a timely fashion to the industry, and mitigates various risks, ensuring a smooth transition from the LIBOR index.

By centralizing the communication of the replacement rate for LIBOR, issuers, their associated trustees, agents, and the investor community alike use the DTC process to disseminate replacement rate information.

The solution allows for the fielding of descriptive reference data for efficient, machine-to-machine communication, instead of relying on individuals or teams to review large, complex legal documents to determine these details.

Issuers, their trustees, and agents can input descriptive benchmark replacement rates directly into DTC’s system. Users of LENS can select and view this information as the LIBOR notice type. In addition, buy-side, sell side and data providers can subscribe to and consume the automated output by contacting DTC Data Services.

By centralizing the communication of the replacement rate for LIBOR, investors in these securities can be confident that they will understand the interest rate calculation for securities formerly indexed to LIBOR.

Some of the many benefits include:

• Safe, secure point of entry: The online web form is protected through several security protocols so you can be confident that the information being communicated is sound
• Single User Interface (UI): Communicate the LIBOR index replacement for your all securities in one place through a flexible web UI
• Designed with the industry: The UI and the fields found within along with the consumable output have all been vetted and agreed upon through various industry working group sessions
• Standardized data to communicate: The format of the fields and how they are used have all been agreed to and are meant to be communicated machine-to-machine
• Choose what you would like to submit: You can upload multiple documents including PDFs, data in bulk using Excel workbooks or Comma Separated Value (CSV) files, or you can use a preloaded form to seamlessly communicate the descriptive information
• Flexible output available: Consumers can opt to receive this information via a data file, API or via the LENS application
• Future integrations possible: The convenient, feasible, and straight through nature of the issuer agent portal and associated outputs can be expanded to other processes to help streamline the investor communication pipeline