Libor floors are back in the institutional market

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Investors are demanding Libor floors on institutional term loans as the Libor rate continues to drop. While 3-month Libor has been in a declining trend since 1Q19, it has plunged since the COVID-19 crisis hit. The average 3-month Libor rate has dropped to 0.67% so far this quarter from 1.53% in 1Q20 and a much higher 2.51% a year ago.