Kira for IBOR Review

Gain an immediate high-level understanding of the potential impact an IBOR transition will have on your documents and quickly tailor and export summaries of important provisions.

The Financial Conduct Authority’s decision to move away from LIBOR by 1 January 2022 as the primary reference rate for short term lending has left financial institutions and investment funds with the daunting task of reviewing enormous volumes of contracts to determine which of them are impacted by the LIBOR transition, which of them have sufficient fallback mechanisms in place, and which of them need to go through an amendment and repapering process. Although the transition date is more than two years away, affected parties need to start the review process now. This will mark just one step to the eventual global transition away from IBORs generally, as various jurisdictions are in the process of replacing other IBORs such as EURIBOR in the EU, BBSW in Australia, and CDOR in Canada, to name a few.

Kira’s state of the art machine learning technology automatically identifies and extracts information from contracts and comes with over 700 built-in smart fields, a number of which are directly related to IBOR review; 24 credit/facilities agreement smart fields, 14 corporate bond indenture smart fields, and multiple smart fields for ISDA Master Agreement Schedules and ISDA Credit Support Annexes. If the review requires the identification of additional or unusual information, Kira Quick Study can be used to identify virtually any desired clause. Using Kira’s intuitive user interface, organisations gain an immediate high-level understanding of the potential impact an IBOR transition will have on their documents and can quickly tailor and export summaries of important provisions.

Avoid potentially significant commercial implications with fast and accurate document reviews

Permanent LIBOR cessation can have significant commercial implications on affected parties, what may seem like a small deviation in interest rate will be very costly in large debt transactions. Even where impacted documents are correctly identified, in depth legal analysis will be required to ensure that fallback mechanisms are robust enough to withstand a permanent replacement of LIBOR and are satisfactory to affected parties, to avoid the costly exercise of amendments and repapering.

Organisations, and those law firms and consultants assisting organisations, should consider how the transition away from LIBOR could affect their (or their clients’) existing and upcoming debt transactions. They need to act early because, although the transition date is 1 January 2022, this leaves little time considering the number of documents that need to be reviewed and the multiple stages required for a full review.

Kira can quickly review large volumes of legacy contracts and highlight the information that should be reviewed and considered in the context of an IBOR review. This enables organisations to begin preparing a review and repapering plan immediately, and helps mitigate potential financial and other risks associated with IBOR cessation.

Customers can use the built-in IBOR smart fields to locate specific concepts relevant to an IBOR review, including (without limitation):

In credit/facilities agreements:

“Base Rate” Definition
“LIBOR” or “Eurocurrency” Definition
“Maturity Date” / “Termination Date” Definition
“Applicable Margin” Definition
Unavailability of Screen Rate / Absence of Quotation
Inability to Determine Rates / Market Disruption
LIBOR Fallback Mechanism
Interest Rate Amend
Majority Class Approval

In corporate bond indentures:

Interest Rate
“LIBOR” Definition
Maturity Date
LIBOR Initial Determination
Unavailability of Screen Rate / Absence of Quotation
Optional Redemption
Supplemental Indentures

How does it work?

Kira processes contracts in dozens of formats and automatically converts them to machine readable text. It includes workflow tools for your team to validate the results prior to them being exported into reports in Excel, Word or PDF.

Kira is the leader in machine learning contract data extraction

Kira has been used on thousands of concurrent projects, helping hundreds of organisations gain greater visibility into their contracts. Our users include many of the world’s leading professional service firms and companies, in over 40 countries. We are among the most used and trusted AI solutions for professionals anywhere. There’s a reason why.