The end of the road for USD LIBOR?

The USD LIBOR panel ceases later this month, on 30 June 2023, marking a major milestone in the transition away from LIBOR to robust Risk-Free Reference Rates. However, this is not quite the end of the road for USD LIBOR. Publication of the 1-, 3- and 6-month USD LIBOR settings will continue under an unrepresentative … Read more

Global LIBOR Legislative Solutions

Herbert Smith Freehills LLP have published an article in Bloomberg Law detailing the key legislative and/or regulatory solutions that jurisdictions have adopted to mitigate the risks raised by so-called “tough legacy” contracts following the discontinuation of the London Inter-Bank Offered Rate (LIBOR) on 31 December 2021 in nearly all currencies and tenors (with an extension … Read more

US Enacts LIBOR Transition Law

Introduction President Biden on March 15, 2022 signed into law the Adjustable Interest Rate (LIBOR) Act (the “LIBOR Act”), long-awaited federal legislation to address the potential disruption of contractual continuity and litigation risk posed by financial instruments that incorporated US Dollar LIBOR as a term for the payment of interest but lacked a workable – … Read more

LIBOR transition risks: the brave new world of RFRs

In previous blog posts, we have considered the risks of LIBOR transition for legacy LIBOR referencing contracts. For new transactions, LIBOR has almost been consigned to history, although there are still some areas relating to the use of near risk free rates where the market has not yet settled. In this briefing, our colleagues in the … Read more

Final part of UK LIBOR legislative solution receives Royal Assent

This week, the Critical Benchmarks (References and Administrators’ Liability) Act 2021 received Royal Assent and will now pass into UK law. The Critical Benchmarks Act represents the final part of the UK’s legislative framework to deal with LIBOR cessation and its passage is welcome news, particularly with the hard deadline for most currencies of LIBOR … Read more

LIBOR transition risks – November 2021 update

With three months to go before the end of LIBOR as we know it (save for certain USD tenors), regulators around the globe continue to emphasise the importance of active transition away from the benchmark. In the UK, the FCA is simultaneously affirming this message while clarifying the scope of the UK legislative solution for … Read more

Amending legacy LIBOR contracts: how to cater for near risk-free rates

Herbert Smith Freehills LLP has published an article in Butterworths Journal of International Banking and Financial Law on amending legacy loan agreements to replace LIBOR with near risk-free rates. Following the Financial Conduct Authority’s announcement on 5 March 2021 that all LIBOR settings will either cease to be provided by an administrator or no longer be representative … Read more

The UK’s LIBOR safe harbour legislation: a missed opportunity?

The Critical Benchmarks (References and Administrators’ Liability) Bill (Bill) was today introduced to the UK Parliament and the first reading took place. The Bill introduces a legal “safe harbour” within the primary legislative framework for the UK’s LIBOR legislative solution, the Financial Services Act 2021 (FSA 2021). It follows a consultation paper published by HMT … Read more