PENDO SYSTEMS: LIBOR Fallback Engine

LIBOR is the reference rate for tens of millions of contracts worth more than $400+ trillion, ranging from mortgage products to derivatives. LIBOR terms and conditions (T&Cs) are hardwired into virtually all manner of financial activity, such as risk, valuation, performance modeling, and retail/commercial contracts.  As such, LIBOR has been referred to as “the world’s most important number”.

Unfortunately, LIBOR fallback T&Cs are buried in millions of unstructured documents that are not machine-readable thereby impeding the industry’s ability to discover, prioritize and execute necessary actions to manage this transition with the needed transparency and confidence to minimize operational risk and expense in advance of the December 31, 2021 – the expected LIBOR sunset date.

OUR SOLUTION

Pendo’s LIBOR Fallback Engine is an end-to-end, automated solution that renders unstructured source documents machine-readable so we can quickly surface all the necessary LIBOR fallback language and feed that language into a downstream workflow tool that accelerates and simplifies the contract remediation process.  Once that process is complete, the recommended LIBOR replacement language can be inserted into an amended and re-stated contract during the re-papering process, whether that’s SOFR vs LIBOR, or involves the LIBOR – Sonia transition.

Ingest & Index

Pendo ingests the unstructured LIBOR contracts and immediately indexes the content.  Users can immediately use our powerful search tool to locate all required fallback terms, prior to recovering the language via mapping and classification.

Mapping & Classification

Users can precisely define the Fallback language they are looking for, then use our powerful rules-based tool to accurately recover all the required terms.

Review & Export

The platform allows users to customize the output format to meet the project’s needs.  In this example, the syndicated loan fallback terms have been precisely conformed so they can be fed into a downstream workflow system so the remediation process can begin.

Workflow Remediation Tool

The output from Pendo is sent to a downstream workflow tool that enables users to quickly review fallback terms and route all documents to the appropriate department based on the language recovered from each of the LIBOR documents.  Users are also able to customize the workflow tool to match their internal LIBOR business processes.

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