Module IV· InterestBasic
Question
Which reference rate is typically used for EUR LBO debt today?
Answer
EUR LBO standard since 2022
| Tranche | Reference rate | Example |
|---|---|---|
| EUR Senior TLB | EURIBOR 3M | EURIBOR + 425bps |
| EUR RCF | EURIBOR 3M/6M | EURIBOR + 350bps |
| USD Senior TLB | Term SOFR | SOFR + 425bps |
| GBP Senior TLB | SONIA | SONIA + 425bps |
Important
LIBOR was permanently discontinued in June 2023. SOFR dominates in the US (>95%). EURIBOR remains the standard in Europe.
Pitch tip
'LIBOR → SOFR spread impact?' → Marginal, ~10-15bps credit spread adjustment (CSA), because SOFR is risk-free.