Case Studies
Delivering successful outcomes for our clients

Centrus support Equitix on transitioning their vast portfolio of project companies with facilities referencing outgoing LIBOR to Sterling risk-free rate SONIA

Background

LIBOR has been on its way out since, in 2017, the FCA declared it would cease to be published and the market should look to transition to a more robust reference interest rate. This meant legacy LIBOR referencing loans and derivatives would have to transition to SONIA, the chosen alternative rate, by the set deadline of 31st December 2021.

Given the vast number of companies under Equitix management, the majority of which have LIBOR referencing contracts, Centrus were engaged to support bank negotiations, project manage the various stakeholders involved and reduce the overall cost of the transition through efficiencies achieved.

Given some of these contracts have a predetermined LIBOR period ending in 2022, work is still ongoing to transition these ahead of the next interest payment dates.

The Centrus Solution

  • Approached lenders to negotiate transition protocols across LMA and ISDA agreements, as pre-agreed approach with shareholders
  • Acted as the point of contact and handled project management of the transition across bank counterparties and legal advisors
  • Supported the execution and implementation of loan agreements, together with legal advisors
  • Advised on the amendment to ISDAs/trade confirmations to ensure they mirror the agreed approach on the loan side
  • Advised on practical aspects of maintaining debt instruments with RFRs going forward

Added Benefits

  • Centrus’ appointment allowed for a consistent position to be put to lenders, and pushed for market standards amongst lenders
  • Acting as the point of contact for the large volume of lender communication on the transition reduced the work-load for the company directors
  • Having an overview of the portfolio companies’ financing helped to streamline the transition process
  • Offered independent advice when supporting both Equitix and their co-shareholders

 

Sophia Thorpe-Costa, Director – Equitix Centrus´ expertise and project management skills helped us transition from LIBOR to SONIA on over 100 different financing platforms. This also involved managing a range of stakeholders, including 40+ existing lending relationships. We are delighted with their support, which resulted in significant efficiencies.
David Cerqueira, Director – Centrus It was a pleasure to work closely with the Equitix team and manage this workstream on their behalf. We hope this relationship can lead to further interesting initiatives.

Release Date: 16th February 2022