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LIBOR transitionin a few clicks

Add AXDRAFT to your tool kit to meet the change by the time LIBOR ends, and navigate the shift at a comfortable pace.

Book a demo

Add AXDRAFT to your tool kit to meet the change by the time LIBOR ends, and navigate the shift at a comfortable pace.

Book a demo

Get thousands of LIBOR transition amendments done in less than 2 weeks

What is LIBOR transition?

LIBOR is an interest rate benchmark used as a reference for providing adjustable-rate consumer financial products (mostly loans and mortgages).

For decades LIBOR has given banks a secure and reliable groundwork for loan granting, resulting in millions of contracts worth over $240 trillion referencing this index.

Yet in 2021 it has been decided that LIBOR needs to be abandoned for safer and more credible benchmark rates due to the following reasons:

  • LIBOR is calculated based off the transactions between banks, which no longer happen as often
  • The index numbers were subject to numerous manipulations in favor of the loan providers

This process became known as LIBOR transition. Its magnitude is driven by millions of deals hinging on the floating interest rates that now need to be revisited.

When will it happen?

LIBOR cessation will take place within the following timeframes:

December 31, 2021 - for 1-week and 2-month USD LIBOR

June 30, 2023 - for non-USD LIBOR and for 3-month, 6-month and 1-year USD LIBOR

Roadmap to move your contracts away from LIBOR

LIBOR transition calls for massive updates to the operational and accounting systems, which need to be reflected in the legal contracts, both new and existing.

This places the revisions of contracts that mature after 2021 at the heart of the shift. And while the approaching deadline multiplied by the number of affected contracts needing amendment may leave you second-guessing whether you're going to make it through safely, we can assure you that you will.

Here's how you start:

Gather all affected contracts and templates in a single place. Make sure they are easily accessible and searchable.
Analyze the contracts for potential risks and weak or missing fallback language (no fallback trigger event/benchmark replacement rate/benchmark adjustment).
Categorize your contracts based on the level of risk they pose to your company (high-risk, medium-risk, low-risk).
Build a LIBOR transition team, who will be in charge of the decision-making and control of the transition activites. This group can include a C-level executive, general counsel, IT team, and accounting team.
Put together a transition strategy that will encompass all activity across all affected areas. Outline the specific approaches towards mitigating risks, minimizing costs, and avoiding delays. Identify the alternative risk-free rates that will replace LIBOR.
Mobilize your contract management resources and automate redundant and simple manual tasks. Employ document automation and CLM software to minimize friction during the transition and streamline contract processes going forward.
Put together model fallback language that you will use across all of your contracts, both the ones that mature after 2021, and the new contracts you'll draft under SOFR rate or any other benchmark rate that applies.
Establish a clause library for your contracts to speed up contract update processes. This is best done inside the CLM to simplify search and replacement, and avoid errors.
Develop a playbook to keep your business units and counterparties updated and guide them through the transition without problems or bottlenecks.

Update all your contracts without rushing.
Beat the deadline

Book a demo
How AXDRAFT makes Libor transition easier?
Document generation
Build the clauses with fallback language and references to new benchmark rates into your contracts with condition-based logic. Ensure your teams always use the right contract template without any errors.
Bulk contract drafting
Issue batches of contract amendments without any effort, by answering simple questions and auto-filling counterparty information.
Data transfer
Automatically pull data from your database, legacy contracts, or public registers into your contracts. Don't waste time on copying and pasting.
Contract organization and one-click assembly
Group related contracts into projects inside AXDRAFT CLM to sort them by risk category or counterparty. Generate documents within the group in a single click, with pre-filled structure and data.
Document review and approval workflows
Automatically deliver your contracts to the right team members, at the right time with custom approval logic based on contract type and metadata. Manage access with built-in user roles to avoid unwanted changes.
Clause playbooks
Arrange your fallback language and all the LIBOR-related updates into dynamic clauses that can be easily integrated into your existing contract structure.
Legacy contract processing
Upload your existing contracts onto the AXDRAFT contract management platform and mark the key components (contract value, LIBOR rates, expiration date, fallback language) as metadata available for further use and reporting.
Task management
Structure your contract tasks in a to-do list, easily notify team members on any status changes, or follow them up in one click if their attention is needed.
Analytics and reporting
Build granular custom reports based on the document metadata to zoom in on your performance across specifc laterals.
Built-in e-signature
Quickly gather client signatures on the ammended contracts with native AXDRAFT Sign functionality, or connect DocuSign or any other software you prefer. Track the status of your processed contracts and avoid any drawbacks.

Enjoy a ridiculously painless LIBOR transition with AXDRAFT

Book a demo