Beyond Libor What will happen once Libor is gone?

The use of Libor as the reference rate is expected to be discontinued at the end of 2021. A new reference rate needs to be defined for Libor-based banking products, including for the UBS Lombard Rollover Loan. UBS is collaborating closely with working groups for the affected currency areas in order to coordinate the orderly replacement of Libor in the relevant currency.

The National Working Group on Reference Interest Rates in Swiss Francs (NWG) has recommended the money market rate SARON (Swiss Average Rate Overnight) as the successor to the CHF Libor. SARON is therefore the new reference rate for UBS Lombard Rollover Loans in Swiss francs. UBS is currently working on developing a successor product to replace the UBS Lombard Rollover Loan, which will be introduced for different currencies on the market.

Possible successor reference rates in affected international currency areas have already been developed.

Existing clients with a UBS Lombard Rollover Loan will be notified in due course of the switch.

Key information about the replacement of Libor

In the context of Libor replacement, working groups have been set up in the five Libor currency areas (CHF, EUR, USD, GBP, JPY) to coordinate the transition to new reference interest rates. These working groups are in regular contact with each other and UBS is represented among all of the national working groups. In the future, a different reference interest rate for each currency is expected.

The money market interest rate SARON was recommended by the National Working Group as a future reference for Swiss francs.

There are very concrete ideas about the future reference interest rates for the other Libor currencies too.

UBS is currently working on the design of a successor product to replace the UBS Lombard Rollover Loan. This will be introduced for different currencies on the market.

Clients with an existing UBS Lombard Rollover Loan will be notified of the switch in due course.

Yes. The current discussion on replacing Libor does not affect the products offered by UBS at the present time. UBS Lombard Rollover Loans with maturities of one month and three months can still be agreed in the currencies CHF, USD, GBP and JPY.

New UBS Lombard Rollover Loan agreements contain a clause stating what will happen if the Libor is no longer available in the relevant currency as the reference interest rate before the end of the fixed-rate period

The procedure for the conversion of current UBS Lombard Rollover Loans will be announced in due course.
Clients can already contractually convert their UBS Lombard Rollover Loan into a UBS Lombard Fixed Advance free of charge at the end of the fixed-rate period providing they do so at least two Swiss bank working days before the interest rate is set.

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