Ginnie Mae Updates Applicability of ARRC LIBOR Fallback Recommendations

Ginnie Mae recently issued Multiclass Participant Memorandum 20-03 (MPM 20-03) to announce the adoption of the Alternative Rates Reference Committee (ARRC) recommendations for fallback language for LIBOR floating rate securities issued before March 2020.

As mentioned in a prior WBK article, Ginnie Mae had announced it would adopt ARRC recommendations for fallback language for LIBOR floating rate securities issued in March 2020 or later.  Therefore, all Ginnie Mae LIBOR floating rate securities will follow ARRC fallback language.

As noted in the MPM 20-03, “[f]or all LIBOR floating rate securities, Ginnie Mae will determine: if and when a transition event occurs with respect to LIBOR; the date on which LIBOR will be replaced for LIBOR Classes; and the applicable benchmark replacement for LIBOR and spread adjustment, in each case using, and subject to, the defined parameters or list of alternatives specified in the ARRC [r]ecommendations, some of which contemplate or require action by other regulatory bodies.”