Interest rates

The alternative reference rates committee announced in June its recommendation of a broad Treasuries repo financing rate as an eventual replacement for U.S. dollar Libor, which is derived from polling data.

A Fed committee studying Libor’s replacement has dwelled heavily on the potential impact to the derivatives market. Loans may become a bigger part of the conversation later this year, but the panel plans to leave a lot of the specifics up to lenders.

While leveraged loans may use prime as a fallback, getting unanimous consent from collateralized loan obligation investors to use an alternative benchmark could be a challenge.