Market Trends 2020/21: LIBOR Floor Provisions

Summary

This practice note discusses LIBOR floor provisions, including current market trends in publicly filed credit agreements and commitment letters from the second half of 2020 and first half of 2021. Lenders tended to increase LIBOR floor percentages in 2020 during the height of COVID-19 in response to the dropping LIBOR benchmark rate. With a stabilizing market in 2021 and the end of LIBOR as a benchmark rate in sight, lenders have not focused on LIBOR floors in recent transactions and LIBOR floor rates have fallen back closer to the norm of 0% in the first half of 2021.