When LIBOR goes away, do I have to do anything with my loan or my hedge (swap or cap)?

Yes.  The fallback language in the borrower’s loan documents will likely not match to the corresponding fallback language in the hedge, leaving the borrower exposed to a mismatch in indices, or “basis risk.” In order to avoid this basis risk, the borrower will have to revisit the loan and swap documents to amend the fallback terms on a bilateral basis.  Use our calculator here to quantify your potential risk.