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ICAM & Bloomberg Report: 560 Issuances Totalling $190 billion Outstanding in LIBOR-linked Bonds in APAC at Risk

1st June 2021 | Hong Kong

ICAM and Bloomberg have released a report on transition from LIBOR to risk-free rates (RFRs), with 80% of 560 issuances totalling $190 billion outstanding in LIBOR-linked bonds in Asia-Pacific (APAC) at risks and without fallback language (transition from LIBOR). On 5th March 2021, the UK Financial Conduct Authority (FCA) had announced the ending of LIBOR, including the end-dates of LIBOR in different jurisdictions, with key LIBOR end-dates being 31st December 2021 and immediately after 30th June 2023.  (LIBOR ~ London Interbank Offer Rate)

“560 Issuances Totalling $190 billion Outstanding in LIBOR-linked Bonds in APAC at Risk”


International Capital Market Association (ICMA) represents financial institutions active in the international capital market worldwide.

The Financial Conduct Authority (FCA)is the conduct regulator for nearly 60,000 financial services firms and financial markets in the UK and the prudential supervisor for 49,000 firms, setting specific standards for 19,000 firms.


$190 Billion, 560 Outstanding Legacy Bonds in APAC – LIBOR-linked Bonds

United Kingdom Winsor Palace
United Kingdom Winsor Palace

Globally, LIBOR-linked bonds comprised of 4998 issuances totalling $854 billion, with 560 issuances totalling $190 billion in Asia-Pacific.  Japan, China and Australia accounted for 95% of the APAC assurance with 74% concentrated among financial issuers.  

As of 1st February 2021, 55% (309 issuances) of the APAC bonds (560) have fallback language in place (transition from LIBOR), of which 196 issuances have only a “market disruption trigger” (not taking into account of LIBOR transition).  The remaining 45% (251 issuances) do not have any fallback language.  In (Data: Bloomberg 1/2/21)


The report by ICMA & Bloomberg is titled Guide to Tough Legacy Bonds in Asia-Pacific:

[New LIBOR-linked bonds

The report noted that the best way to minimise LIBOR transition risks is not to issue new bonds linked to LIBOR, and the GBP and USD market have responded to this with prolific use of the relevant RFRs for new issues of bonds and securitisations. But if LIBOR-linked issuance is unavoidable, fallbacks for new issuances of USD LIBOR and JPY LIBOR have been recommended. However, issuance of new LIBOR-linked bonds is continuing in APAC, in some cases without the recommended fallbacks in place. From 2019-2020, USD12 billion of new issuances had no fallback language.

New RFRs

Methodologies and conventions to accompany new RFRs are keeping pace, and publication of RFR indices may make it easier for market participants to use the various RFR compounding methodologies. And while underlying systems and infrastructure may need to be upgraded, issuers and bondholders are largely able to accommodate the new rates, including their in-arrears methodologies and associated conventions.


In summary, the report found that 80% of tough legacy APAC bonds have inadequate or no fallbacks in place at all, and that transactions in APAC are continuing to reference LIBOR without adequate fallbacks in place. 

The report also set out proposed solutions for addressing the risks of tough legacy, including the feasibility of consent solicitation under different legal systems, the application of certain legislative interventions to APAC tough legacy bonds under New York, Japanese and English law and the potential for the continuation of synthetic JPY LIBOR for one additional year after the end of 2021. ]



Bloomberg Head of APAC, Bing Li:

“Prior to our report, publicly available data has been generally based on individual national markets or sub-markets, and difficult to aggregate or reconcile. We hope this new extensive analysis will help market participants and supervisory authorities develop more efficient strategies to address the tough legacy bond problem in APAC.”


ICMA Chief Representative APAC: Mushtaq Kapasi:

“The tough legacy bond problem in Asia-Pacific is not insignificant, with 80% of tough legacy bonds having inadequate fallbacks, or no fallbacks at all. The transition away from LIBOR will require issuers and investors to review their existing LIBOR-linked bond documentation to assess what kind of fallbacks they contain, and consider what actions need to be taken.”



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