Herbert Smith Freehills has advised BAT on its new £6 billion multi-currency revolving credit facility. It is the first widely syndicated credit facility executed globally to be linked to both the Sterling Overnight Index Average (SONIA) and the Secured Overnight Financing Rate (SOFR), in anticipation of the cessation of the London Interbank Offered Rate (LIBOR).
The new facility consists of a £3 billion 364-day facility and a £3 billion five-year facility, and will principally be used for backstop liquidity purposes.
Will Nevin commented: "We are very pleased to have assisted BAT, a long standing client, in leading the market in the transition to risk free rates for a widely syndicated multi-currency loan transaction. This has been a truly collaborative effort between all the parties and we hope that it will assist others in moving forward with their transition from LIBOR to alternative reference rates."