Recent Announcements

What is LIBOR?

London Interbank Offer Rate (LIBOR) is a widely accepted benchmark interest rate representing the short-term, unsecured, wholesale borrowing rate at which banks borrow funds from other banks in the London market. A group of panel banks submits rates on a daily basis, which are averaged and published in a variety of currencies.

LIBOR has grown to become a global benchmark interest rate for over $350 trillion in financial products, including bonds, derivatives, mortgages, and other loans.

LIBOR is being phased out

For over 40 years, LIBOR has played a significant role in the worldwide financial services industry. However, the Financial Conduct Authority (FCA), which oversees the rate, has indicated it will no longer compel banks to continue to submit rates beyond 2021. As a result the number of submissions could fall significantly, reducing the representativeness of LIBOR or cause LIBOR publication to cease entirely. The FCA’s statement triggered what is now known as LIBOR transition. Therefore, it’s critical for LIBOR to be replaced by the end of 2021 with a stronger, more reliable benchmark.

What will replace LIBOR?

The Alternative Reference Rate Committee (ARRC), a financial industry group, has recommended using the Secured Overnight Financing Rate (SOFR) to replace USD LIBOR. The ARRC was convened by the Federal Reserve Board and the New York Fed specifically to help facilitate the U.S. transition away from LIBOR. Members include a mix of banks, accounting firms, legal firms and other industry representatives.

Information about the SOFR from the ARRC can be found at any of the following links:

What is the timeline for the LIBOR transition?

The timeline and progress of the transition can be found here:

How will the Libor Transition Impact FHN Financial Customers?

The LIBOR transition will impact certain FHN Financial products and services that customers currently hold or use and those that may be offered in the future. While the extent of the impact will depend on a range of factors which include evolving market and industry developments, potential impacts include changes to valuations, documentation and product performance.

Please note that the impact of LIBOR cessation on existing LIBOR-linked transactions depends on the terms and conditions of the transaction and particularly on the “rate fall back language” which (if applicable) determines the interest rate benchmark that would prevail should LIBOR cease to exist or become unavailable.

How can I prepare for the LIBOR transition?

See the following PDF for a checklist:

What is the difference between LIBOR and SOFR?

LIBOR is an unsecured rate based on submissions from a panel of between 11 and 16 banks. The submissions are intended to reflect the interest rate at which banks could borrow money on unsecured terms in wholesale markets. Currently, 35 individual LIBOR rates are produced in 7 tenors across five currencies. Daily transactional volume estimates for a 3-month LIBOR are around $500 million (

SOFR is a secured rate derived from the cost of borrowing cash overnight collateralized by U.S. Treasury securities. The rate is composed of tri-party repo, General Collateral Finance repo, and bilateral Treasury repo transactions through the Fixed Income Clearing Corporation (FICC). Transactional volumes regularly exceed $800 billion daily ( No forward-looking SOFR term structure currently exists since SOFR is a daily rate, but is part of the ARRC’s transition plan.

In addition, SIFMA has published "SOFR Primer: The transition away from LIBOR" on the topic. (

Risk free rate (no credit risk)Bank lending rate (includes credit risk)
Overnight (backward looking)Forward looking
Secured (collateralized)Unsecured (uncollateralized)
Calculated & published daily by the NY FedCalculated & published daily by ICE Benchmark Administration
Transaction basedBased on LIBOR bank submissions & expert judgement
Based on ~$1T transactions per day (repo markets)Based on ~$1B transactions per day (3-month LIBOR)
No term structureTerm structure

Additional LIBOR Resources

ARRC Best Practices

ARRC Recent Publications (not a comprehensive list)

Ginnie Mae HECM Transition Documents

Who is driving the industry transition?

The LIBOR transition is a major structural change to the global financial markets. Accomplishing the task requires input and coordination of many different market and industry participants including: regulators, industry groups, trade organizations, and financial institutions.

We’ll be ready and keep you updated

The expected transition to a new benchmark following the widespread use of LIBOR in the financial markets will be a significant event. FHN Financial has a working group that is monitoring the LIBOR developments closely. Check this page for the most up to date FHN Financial information.