Is Your Supply Chain Finance Program Prepared for the LIBOR Transition?

Updated March 22, 2021: On March 5, 2021, the ICE Benchmark Administration (IBA) officially confirmed plans to postpone the phase out of USD LIBOR for overnight and 1, 3, 6, and 12 months until June 30, 2023. The phase out for USD LIBOR for 1 week and 2 months is still scheduled to be complete by December 31, 2021.

After reflection on the continued disruptions affecting the global economy, the ICE Benchmark Administration announced in late November a plan to push back the phasing out of LIBOR for the U.S. dollar. Originally scheduled for December 2021, the deadline will now be extended to June 30, 2023 as currently proposed.

According to the Fed, the extension will allow a majority of contracts tied to LIBOR to “expire naturally and avoid having to shift them to a new benchmark.” This is welcome news. Our experience working with banks as they prepare for this transition has given us insight into the scope of adjustments that will need to be made on their part. There is a desire to minimize disruption given current market conditions and the Fed’s guidance aligns with that. The consultation period for this extension ends at the end of this month, so we anticipate a final decision soon.

Since the 1980s, LIBOR (London Inter-bank Offered Rate) has effectively served as the benchmark rate for loans across the world. During the global financial crisis, however, it drew scrutiny when financial institutions manipulated it to boost returns and hide financial weaknesses.

Ever since, there have been global calls for a replacement. Leading the charge has been the Fed in the U.S., the Bank of England and Financial Conduct Authority in the UK. For more information on why it’s going away, read my previous blog.

With the transition on the horizon (albeit further out), many companies that use supply chain finance to improve cash flow are wondering what it might mean for their program funding and how they can prepare. If you are a PrimeRevenue customer, or a supplier participating in a PrimeRevenue-led supply chain finance program, you can rest assured. Our funders are taking the transition seriously and proactively preparing for a transition that will likely have negligible, if any, impact on program funding.

Comparing LIBOR to the Alternatives

The main difference between alternative rates and LIBOR is that LIBOR is based on forecasts provided by banks while its replacements are based on accounting rates of return (ARR) from actual transactions.

There are a multitude of alternative rates throughout the world, but the ones that have gained the most traction are: SOFR for USD, SONIA for GBP, TONAR for JPY, ESTER for EUR, and SARON for CHF. Here is a brief overview of each:

  • Secured Overnight Financing Rate (SOFR): SOFR is published by the New York Federal Reserve and will be the replacement for the U.S. market. It’s a secured rate reflecting transactions backed by U.S. Treasuries, compared to LIBOR which is unsecured. There are two types of SOFR: simple interest and compound interest. Simple interest is very similar to LIBOR, so it will be a relatively light lift to switch to this rate. Compound interest requires more back-office work for the banks, which is why it currently seems like most banks will most likely opt for simple interest SOFR for trade finance.
  • Sterling Overnight Index Average (SONIA): SONIA is the effective overnight interest rate paid by banks for unsecured transactions in the British sterling market. SONIA has been under the oversight of the Bank of England since 2016 and was most recently reformed in 2018. The key difference between SONIA (and other rate alternatives) and LIBOR is that LIBOR is forward-looking – it is agreed upon at the start of an interest period and reflects the market’s expectations of the new rates in the future. SONIA is backward-looking and cannot be determined until the end of an agreed interest period, although there are current trials for a forward-looking SONIA structure.
  • Tokyo Overnight Average Rate (TONAR): TONAR is an unsecured interbank overnight interest rate and has been recommended by the Bank of Japan as its preferred risk-free reference rate since 2016. It’s based on transactions in the uncollateralized overnight borrowing market.
  • Euro Short Term Rate (ESTER): ESTER is based on the borrowing cost of the wholesale euro unsecured overnight borrowing costs of euro-area banks. It reflects an average of approximately 500 daily transactions amounting for nearly €40 billion with a broad range of participants including pension funds and insurance companies. This is different from LIBOR in that it’s based on more representative input and much higher transaction volume than the interbank market.
  • Swiss Average Rate Overnight (SARON): Like SOFR, SARON is based on overnight trades between financial institutions, but in the Swiss franc–denominated repurchase agreement market. SARON is based specifically on transactions between financial institutions. Like SONIA, SARON was already in use before scandal overtook LIBOR. Banks are already selling SARON-based mortgages, although other credit products are still largely priced off of LIBOR.

What Does This Change of Plans Mean for Supply Chain Finance Stakeholders?

Fortunately, all stakeholders involved in PrimeRevenue-led supply chain finance (and finance, in general) will benefit from a potential extended deadline for phasing out LIBOR.

  • Banks: Financial institutions will have a longer runway to work through operational changes and concerns. This includes working with their technology partners like PrimeRevenue to strengthen their game plan for the transition.
  • Suppliers: A large portion of PrimeRevenue’s transactions are in USD, which means it will be largely business as usual until mid-2023. When the deadline comes to transition, there will be minimal changes to current pricing/rate methodology for suppliers moving to simple-interest SOFR programs. Plus, suppliers will have more time to understand replacement rate calculation structures.
  • Buyers: Like suppliers, buyers will have more time to educate their treasury/finance and procurement teams on LIBOR’s replacements so they can better respond to supplier questions.

PrimeRevenue will continue to publish reports with both education and guidance. We are actively engaged with financial institutions’ planning efforts and are providing counsel to our buyer customers as they seek to better understand these changes. We’ll continue to pass along the knowledge gained from these interactions as new updates emerge.

How You Can Proactively Prepare for the Transition Away From LIBOR

So far, the prevailing trend is that LIBOR will be replaced with similar simple interest, forward-looking rate calculation structures. This approach is similar to LIBOR’s and is already supported by the PrimeRevenue platform.

Meanwhile, we are taking steps to ensure our platform is ready to support our funder partners’ preferred interest rate calculation method. Fortunately, this isn’t new territory for us. Our customers already benefit from our platform’s ability to support multiple rate structures. As a multi-funder supply chain finance provider, we are experienced working with funders who use their own proprietary, non-LIBOR interest rate calculation structures.

When asked by customers how they can best prepare for this change, my response is simple – you’re already covered! As I mentioned earlier, PrimeRevenue is proactively working with our banking partners around the world to make sure the transition away from LIBOR is as smooth as possible for our clients. We’re providing regular guidance on choosing a rate structure that favors all parties – banks, suppliers and buyers. Our solutions and team are ready and capable. If any changes are required, know we are one step ahead and ready to pivot for whatever may happen.

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Stephanie Wargo

VP, Global Head of Marketing

Stephanie joined PrimeRevenue in 2015 and oversees the company’s global marketing team and strategy. With a data-driven approach, Stephanie focuses on demand generation and thought leadership to drive brand awareness, strengthen client/partner relationships, and generate new sales opportunities. Stephanie has guided PrimeRevenue through new technology releases and an evolving FinTech landscape. In addition to leading PrimeRevenue’s internal and external communications, she implemented innovative demand generation and marketing strategies to enhance the company’s overall sales pipeline.

Stephanie has extensive experience in marketing and customer success. She previously served as Vice President of Marketing and Communications at BitPay and Vice President of Client Relations and Marketing at FirstView Financial. Stephanie earned a B.A. degree in Political Science from Agnes Scott College in Decatur, Georgia.

Brian Medley

VP, Global Head of Sales

Brian joined PrimeRevenue in early 2012, after more than 20 years of sales leadership, executive-level consultant and business growth experience. As VP, Global Head of Sales, Brian leads a growing team of fintech sales professionals with a focus on developing strong customer relationships, improving sales predictability and helping PrimeRevenue enter the lucrative mid-market.

Prior to PrimeRevenue, Brian honed his enterprise software sales leadership skills at Clarus Corporation. He also served as an operations and IT management consultant for Kurt Salmon Associates. In addition to his sales and consulting background, Brian has deep experience in the financial industry having founded a successful residential mortgage broker and lending business. He is a graduate of the Georgia Institute of Technology having earned a B.S. in Industrial Engineering and Economics and M.B.A. in Global Business.

Jason Green

SVP, Global Customer Success

Jason joined PrimeRevenue in 2021 following more than two decades in the fintech/financial services industry. He brings a strong background is sales leadership due to his impressive relationship building capability as well as a successful track record in creating structure and process improvements. In his role, Jason uses his keen attention to detail to strengthen the customer experience and enhance the company’s solutions to deliver more value to clients.

Prior to joining the company, Jason held several senior level and executive roles with a focus on building and scaling sales and support organizations at both large and small companies. Jason graduated from Murray State University with a B.S in Marketing.

Matt Ford

SVP, Global Product Innovation

Matt joined PrimeRevenue in early 2015 and is responsible for overseeing all commercial, strategic and operational aspects of PrimeRevenue’s supply chain finance offerings throughout EMEA, based in Prague. He has been instrumental in gaining global alignment and developing supplier enablement processes for the region.

Matt joined PrimeRevenue following a 15-year career at Morgan Stanley, where he worked in fixed income operations covering debt syndication through bonds, EMTNS, corporate loans and other debt securitization. Notably, he set up non-core location operations in Europe (Budapest) and all lending operations in Baltimore from scratch.

Matt, who was born and raised in South East England, earned a B.S. in Sports Science at University of Teesside where he mastered the art of TEAM development and accountability as a youth international rugby player.

Dominic Capolongo

EVP, Global Head of Funding

Dominic joined PrimeRevenue in 2016, and is responsible for leading our bank and capital markets funding strategies and execution. He focuses on building global, scalable and highly efficient funding structures that maximize options for supporting PrimeRevenue’s programs. Dominic began his career as an attorney and was a partner with Kaye Scholer before joining DLJ as a senior banker. Dominic brings tremendous strategic and capital markets experience in all areas of finance having held senior positions at, among others, Credit Suisse and RBC Capital Markets in addition to DLJ. Dominic earned a JD from Fordham University School of Law and a BA from SUNY Binghamton.

Gavin Cicchinelli

Chief Operating Officer

Gavin joined PrimeRevenue as Chief Operating Officer in 2021. With more than two decades of leadership and executive experience along with a deep understanding of the payments space, Gavin provides a unique focus on improving and strengthening operational strategies and implementing GTM growth execution. He is responsible for leading transformation across corporate and operational strategies as well as building a repeatable and scalable commercial growth strategy that aligns with PrimeRevenue’s core business while delivering key adjacent growth opportunities.

Prior to joining PrimeRevenue, Gavin served as President and Chief Revenue Officer of Integrated Solutions at TSYS, a global payment processing services company acquired by Global Payments (NYSE:GPN). There, he also served as Head of Product and divisional COO. Throughout his career, Gavin has held multiple leadership positions including VP of Sales, SVP of Business Development, and President of Financial Institutions. Gavin graduated from the University of Northern Colorado, Greeley.

David Quillian

Chief Legal Officer

David joined PrimeRevenue as General Counsel in 2007. He and his team have been instrumental in successfully creating the unique legal structures that support PrimeRevenue’s multi-funder model and global funding capabilities. David is also the lead named inventor on PrimeRevenue’s two patents for Electronic Time Drafts, which allow PrimeRevenue to manage supply chain finance programs using electronic negotiable instruments as opposed to accounts receivable. Prior to PrimeRevenue, David was General Counsel at Harbor Payments, which was acquired by American Express (AXP) in 2006, and Magnet Communications, which was acquired by Digital Insight (DGIN) in 2003. He holds degrees in Economics and History from Duke University, and Juris Doctor and M.B.A. degrees from the University of Georgia.

Nathan Feather


Nathan has successfully ushered PrimeRevenue from our very early days as a visionary startup, through the financial crisis to today’s position as a thriving mid-sized leader in the cloud-enabled supply chain finance marketplace since joining PrimeRevenue in January 2006. He was instrumental in recapitalizing the company with an $80M investment led by BBH Capital Partners in 2015. Prior to PrimeRevenue, he held various financial management roles with Ariba, Freemarkets and PriceWaterhouseCoopers. Nathan holds a BS in Accounting from Pennsylvania State University.

PJ Bain


PJ has an impressive and accomplished track record as an enterprise software entrepreneur and executive. PJ has built a solid record of success with PrimeRevenue since being appointed Chief Executive Officer in July of 2009. The company has received numerous awards for growth, customer service, innovation, along with being recognized as a top employer.

PJ is a life-long software and technology entrepreneur having been involved in numerous firms in the roles of founder, executive, advisor and investor. Immediately prior to PrimeRevenue, PJ was the VP and General Manager of Exact Holding N.V. (NYSE/AMS: EXACT), a leading global provider of business software solutions. He was previously Founder and CEO of Inspired Solutions, an Atlanta-based, B2B software and services firm that grew to be the largest reseller of Exact Software in North America, later acquired by Exact. PJ holds a Bachelor of Industrial Engineering from Georgia Institute of Technology.