Transitioning Away From LIBOR – Are You Ready?
By:
Sharon J. Lorman
Richard B. Trauger, Jr.
Andrew S. Rietz
Guests: Matthew Tevis, Managing Director, Head of Sales at Chatham Financial, and Kim Johnston, Director of Regulatory Advisory for Chatham’s Financial Institutions Group
Podcast Show Notes:
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Topic: Transitioning Away From LIBOR – Are You Ready?
Insights from Matthew Tevis, Managing Director, Head of Sales at Chatham Financial, and Kim Johnston, Director of Regulatory Advisory for Chatham’s Financial Institutions Group
LIBOR is widely used as a reference rate for financial contracts and underlies hundreds of trillions of dollars in financial instruments, including loans and derivatives. By the end of 2021, LIBOR is expected to be phased out, which necessitates adopting a new interest reference rate for both new and existing loan agreements. In the U.S., that new benchmark is SOFR (Secured Overnight Financing Rate), which is based on transactions in the U.S. Treasury repurchase, or repo, market, where banks and investors borrow or lend Treasury instruments overnight. The Fed began publishing SOFR in 2018. A number of objections exist to SOFR including that the rate does not reflect underlying credit risk. Our expert guests explain the various aspects of the upcoming transition and share their insights on how community banks can best prepare for this historical change.
Matthew Tevis Biography
Managing Director, Head of Sales
(484) 732-2788
mtevis@chathamfinancial.com
Matt is a Managing Director and leads the Sales team for Chatham’s financial institutions business. He advises clients on a variety of interest rate risk management topics with a focus on hedging solutions. Prior to joining Chatham, Matt worked for over 25 years in capital markets and corporate and institutional banking. He built the derivative sales teams for both the financial institutions and municipal businesses at PNC Capital Markets. He also held leadership positions in financial institutions banking at PNC. Matt graduated with magna cum laude honors from Miami University and has a BS in Finance.
Kimberly Johnston Biography
Director of Regulatory Advisory for Chatham’s Financial Institutions Group
O: +1-720-746-6516
kjohnston@chathamfinancial.com
Kimberly Johnston is a Director of Regulatory Advisory for Chatham’s Financial Institutions Group where she advises banks and credit unions on the impacts of global derivatives regulation. She also serves as a subject matter expert on a range of derivatives documentation and is involved with ISDA working groups tasked with their ongoing development and implementation. She is currently a member of the Operations and Infrastructure Working Group of the Alternative Reference Rates Committee (ARRC).
Prior to Chatham, Kim helped to create and grow the Derivatives Documentation team at Russell Investments. She has held various compliance and client service positions in the investment industry throughout her twenty year career, including at a global financial institution, mutual fund company, venture capital firm and hedge fund.
Kim has a BA from the University of North Carolina at Chapel Hill and an MS in Finance from the University of Maryland. She also received the Certified Compliance & Regulatory Professional designation from the Lubin School of Business at Pace University.
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Watch for episode 59 of This Month in Banking to be released on Tuesday, November 24, 2020, a day early due to the Thanksgiving holiday, and a new episode on the last Wednesday of every month.
Thank you for listening!
Relevant links:
Chatham Financial, (2020, September 11). FAQ: USD Libor transition to SOFR
Chatham Financial, (2020, September 14). Chatham executes first Freddie Mac SOFR interest rate cap