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Fusion LIBOR Transition Calculator

Finastra

Corporate Banking
Lending
Commercial Lending
Corporate and Syndicated Lending
Calculating Alternative Reference Rates for applications unable to calculate their own ARR based interest accruals
Corporate Banking
Lending
Commercial Lending
Corporate and Syndicated Lending
Calculating Alternative Reference Rates for applications unable to calculate their own ARR based interest accruals

   

 

With the replacement of the interest rate benchmark LIBOR to Alternative Reference Rates (ARR), banks and corporate borrowers must be prepared for this challenging and complex operational transition.

Legacy systems in lending institutions cannot process Alternative Reference Rates (ARR) or Risk-Free Rates (RFR)-priced loans, because they weren’t designed to perform these calculations and implementing complex system changes can be costly. Corporates need a quick, easy and accurate way to reconcile or validate ARR-based interest calculations that is flexible. This solution must be able to expand over time as ARR / RFR methodologies evolve.

The Fusion LIBOR Transition Calculator enables lenders and corporates to calculate ARR/RFR-based rates and interest accruals. It independently sources the ARRs/RFRs from exeternal, official market data sources, and calculates ARR rates based on the recommendations of key market conventions, along with corresponding interest accrued amounts for a given set of inputs.

 

Key solution benefits

Here is how Finastra's Fusion Libor Transition Calculator can help banks:

  • A trusted methodology - the solution supports all of the key recommendations from the ARR loan market conventions (Alternative Reference Rates Committee (ARRC), Sterling RFR Working Group, LSTA and LMA), to deliver both consistent and accurate results, every time, thereby helping clients to significantly reduce operational risk and ensure regulatory compliance.
  • Seamless integration - the open API-based offering can integrate efficiently and seamlessly with legacy systems. The calculated ARR rate value(s) and/or accrued interest amounts can directly be consumed by these legacy applications to address conventional interest accrual calculation needs, thereby avoiding the need for complex and costly system changes.

  • Future proofing your business - as the world’s largest lending solution provider, Finastra has the knowledge and expertise to continually expand the calculator service in line with the evolving market and regulatory needs. This helps future-proof your business from any market developments related to this transition, and thereby protect you from additional investments.

Introducing the Fusion LIBOR Calculator web-app

The Fusion LIBOR Transition Calculator is now available as an intuitive user interface (UI) on the FusionStore. Clients can access the web-app as a SaaS solution to perform / validate ARR calculations, without any additional infrastructure, technology, or software maintenance costs.

To check the app in a sandbox environment, click on the “Demo app” button. Note that you should be signed into your FusionStore account to access the demo app; the demo app only supports limited, historic rate data – from 1-Jan-2019 to 31-Dec-2020.

A detailed user guide is available at the following link (Document Name: “Fusion LIBOR Transition Calculator – Web App User Guide”):

https://developer.fusionfabric.cloud/documentation/business-guides/Corporate-Lending-Fusion-LIBOR-Transition-Calculator

 

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