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Chatham’s perspective on the concerns of end users facing LIBOR transition

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Chatham's perspective on the concerns of end users facing LIBOR transition July 12, 2018 (Kennett Square, PA, USA) - Thank you for the opportunity to share Chatham's perspective on the concerns of end users facing LIBOR transition. Chatham is the largest advisor and technology provider to derivatives end users, serving over 2,000 clients worldwide. We serve both financial end users – including regional and community banks – and non-financial end users touching virtually every segment of the economy, from transportation firms, to manufacturers, to real estate companies, to professional sports teams. We undertake a wide range of activities that make us intimately familiar with the impact of LIBOR transition on both derivatives and cash products. These include: • First and foremost, we help our clients hedge more than $2 bn in notional per day. The majority of this activity is utilizing interest rate swaps and caps being used to hedge LIBOR-based loans. • For community and regional banks, we provide systems that allow firms to compete with larger banks in their geographic footprints in offering derivative products to their commercial clients – typically to small and mid-sized businesses. The vast majority of this activity involves providing swaps in connection with the origination of LIBOR-based commercial loans. • We assist real estate firms in raising debt capital to support their acquisition and ownership of property. This capital can take the form of LIBOR-based loans. • We also help companies manage their debt and derivatives portfolios via software that, among other things, calculates payments and performs valuations. On July 27, 2017, the U.K.'s Financial Conduct Authority (FCA) announced that banks would no longer be compelled by the FCA to support LIBOR past the end of 2021. The administrator for the LIBOR Benchmark, ICE Benchmarks Administration (ICE), has said they will continue to publish LIBOR after 2021.

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