LIBOR, the benchmark rate for which there is currently over $200 trillion in USD LIBOR outstanding exposure alone, will cease to be published after mid-2023, with the majority of tenors being discontinued by December 31, 2021. Our Team is focused on monitoring the ever-changing landscape and advising clients on the impact associated with LIBOR cessation.
RECENT PUBLICATIONS
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LIBOR Transition Update: An Overview of Federal LIBOR Legislation
A recent federal LIBOR transition law establishes a nationwide framework for the replacement of LIBOR as a benchmark interest rate in contracts lacking effective fallback provisions that are impossible or practically impossible to amend before the tenor cessation date. We provide an overview of the LIBOR Act and explain why its passage may resolve issues with a patchwork system of state legislation, mitigate market risks and reduce potential litigation arising from challenging legacy contracts.
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LIBOR Transition Efforts Continue in the U.S. with SOFR as the Leading Recommended Alternative Reference Rate
On December 31, the first of the USD tenors will cease being representative. But market participants now have a range of alternative reference rates available to them. We provide an overview of recent regulatory, legislative and LIBOR working group developments and guidance.
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Federal Reserve Directs Examiners to Review Banks’ Exit Plans As LIBOR Deadline Approaches
The Federal Reserve recently issued guidance to examiners to evaluate banks’ LIBOR exit plans in the coming months. In particular, the Fed issued guidance for assessing institutions’ efforts regarding transition planning; financial exposure measurement and risk assessment; operational preparedness and controls; legal contract preparedness; communication; and oversight.
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LIBOR Cessation: FCA Announcement on the End of LIBOR Triggers ISDA’s Spread Adjustment Fixing Date
The UK FCA announced that all LIBOR tenors will either cease to be provided by any administrator or no longer be representative after December 31, 2021 for all sterling, euro, Swiss franc and Japanese yen LIBOR tenors.
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Governor Cuomo Introduces Proposed New York Legislation on LIBOR Replacement
New York Governor Andrew Cuomo recently proposed New York-specific legislation aimed at minimizing the legal and economic impact associated with the transition away from LIBOR. The proposed legislation provides for a statutory replacement benchmark rate for contracts that reference LIBOR and either lack fallback provisions or contain fallback provisions that have LIBOR-based benchmark replacements.
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Recent Developments Impacting LIBOR Transition
Recently, the administrator of LIBOR announced that it will solicit feedback from market participants early this month on its intention to cease the publication of two USD LIBOR settings after December 31, 2021 and the remaining USD LIBOR settings after June 30, 2023. As a result, the most commonly used USD LIBOR settings will likely be published well past the previously expected deadline of December 31, 2021. We discuss this and other recent regulatory and legislative developments impacting the LIBOR transition.
LIBOR IN CONVERSATION
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Jane O’Brien Discusses SOFR as a LIBOR Alternative in S&P Global Market Intelligence
Litigation partner Jane O’Brien appeared in an article in S&P Global Market Intelligence on the transition to alternative interest rate benchmarks in light of the retirement of LIBOR, the London Interbank Offered Rate.
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Manuel Frey and Jane O’Brien Featured on “FinReg” Podcast
Corporate partner Manuel Frey and litigation partner Jane O’Brien were featured on “The FinReg Pod,” a podcast series hosted by Professor Lee Reiners, executive director of the Global Financial Markets Center at Duke Law School.
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Manuel Frey and Jane O’Brien Interviewed in Regulatory Compliance Watch Video
Corporate partner Manuel Frey and litigation partner Jane O’Brien participated in a video interview with Regulatory Compliance Watch.
Our Team
Our Team
Our integrated team of derivatives, tax, securities and financing lawyers can work with investment advisors, public companies and other market participants to assess their LIBOR-related exposure, including developing transition plans for amending contracts and communicating appropriately with investors and other counterparties to LIBOR-linked contracts. Our LIBOR-focused litigation team can offer advice on evolving litigation and regulatory considerations and risk management related to transition preparedness.