Moving to a new interest rate benchmark

A quick guide to upcoming changes in a key reference rate

Information available on this site is provided for existing Global Wealth Management Americas clients with existing LIBOR-referencing positions or products only.

The London Interbank Offered Rate (LIBOR) is being phased out and replaced by the Secured Overnight Financing Rate (SOFR) for certain loans and investments.

What is LIBOR?

LIBOR is a widely used interest rate benchmark that the financial industry has used for many years to set interest payments for many mortgages and loans, as well as interest received from a variety investments.

Why is the industry moving to a new benchmark?

After the financial crisis in 2007/2008, the volume of transactions underlying LIBOR fell, and regulators across major international markets became concerned about the reliability of LIBOR. The move away from LIBOR comes after careful consideration among financial service industry participants and key regulators. Their goal is to provide a more reliable interest rate benchmark.

No new LIBOR-based loans or assets should be originated after the end of 2021. Existing loans and assets will be required to transition away from LIBOR prior to June 30, 2023, and many credit lines and loans will complete the transition by the end of 2021.

How you may be affected

The move away from LIBOR may affect interest paid on adjustable rate mortgages, other variable rate loans and credit lines, as well as investment interest received from futures, corporate bonds, derivatives and other financial vehicles.
 
How you may be affected will depend on your exposure to LIBOR. Your UBS Financial Advisor can tell you whether you have assets or liabilities at UBS that use LIBOR.

Check back for the latest information!

We’ll update this page regularly as regulators and the financial industry finalize details of the LIBOR transition.