On November 12, 2020, the Asia Pacific Loan Market Association (“APLMA”) published two draft discussions on facility agreements (“facility agreements”) for U.S. dollar credit transactions in the Asia-Pacific region. Until recently, the Asian credit market did not have market standards for RFR formulas, price methodology and institutional operational practices. The facility agreements show the main design concepts and elements and calculation methods needed to move from IBOR referencing to a relevant RFR. APLMA does not recommend or support a specific pricing or calculation method. Each proposed facility agreement uses a different method for calculating the secure financing rate, i.e. SOFR, RFR for U.S. dollars: SOFR daily compound and SOFR simpler every day. Appropriate recidivism provisions should be included in all newly issued libor contracts that expire after 2021 (given the entry into force of the ISDA case case protocol on IICDA, this transitional kilometre for derivative contracts can be achieved by the end of January 2021). Based on such feedback, APLMA intends to provide recommended model forms as soon as possible. This will greatly help institutions achieve the various transitional IBOR objectives set by regulators.
. The duty of confidentiality implies a duty of confidentiality that has been agreed primarily in the recommended form of THE APLMA or in any other intermediate form between the company and the lender. Although these documents are widely disseminated by APLMA, they are marked as LMA documents, as they are identical to those used by the LMA, unlike primary market documents. “In general, this service is wonderful. I think the flow of labour law information is very useful and relevant. The quality of the items is generally quite good. The website offers a way to do quick research on various labour law issues. In the guide to the facilitation agreements, APLMA highlighted the following key issues that need to be taken into account by market participants with regard to the transition from LIBOR to RFR: in addition to the branch network, APLMA has a number of offshore committees in China, Taiwan, Malaysia, India and New Zealand. Banks should stop abandoning new LIBOR-related products that mature after 2021. The Hong Kong Monetary Authority, in agreement with the Treasury Markets Association, has defined the following crossing points for Hong Kong banks: INTERPRETATION 1.1 Definitions In this agreement: APLMA stands for Asia Pacific Loan Market Association. While the aforementioned problems are not only in the Asian syndicated lending market, Asia has only slowly developed market practices for these issues relative to the rest of the world. With the recent release of the facilities agreements, the Asian syndicated credit market is expected to quickly catch up with the LibOR Transition Highway.
Advice to market participants who are considering entering into business with their Asian counterparts – close up! Banks should be able to offer PSR-related products corresponding to LIBOR.