Based on regulatory announcements and developments in the marketplace, it is widely expected that the London Interbank Offered Rate (LIBOR) will be discontinued at the end of 2021 (and may be discontinued or declared unrepresentative by relevant regulatory bodies before then). The likely cessation of the publication of LIBOR presents complex transition issues for all parties to contracts that use LIBOR as a reference rate, such as derivatives contracts, floating rate debt instruments and syndicated and bilateral business loans. To illustrate the magnitude of the challenge, it has been reported that approximately $200 trillion of financial instruments employ LIBOR as a reference rate, including approximately $190 trillion of derivatives contracts, $3.4 trillion of business loan contracts (including bilateral and syndicated loans) and $1.8 trillion of floating rate debt securities.
The McGuireWoods LIBOR Transition Blog tracks key regulatory and market developments relating to the LIBOR transition, as well as potential replacement rates, such as Secured Overnight Financing Rate, or SOFR. Visit often to stay abreast of recent announcements, consultations and speeches from key entities that are preparing the marketplace for this transition, including the Alternative Reference Rates Committee convened by the Federal Reserve Bank of New York, the International Swaps and Derivatives Association, the Loan and Syndications Trading Association, the Loan Market Association, the U.S. Securities and Exchange Commission, and the Internal Revenue Service. All thought leadership and market intelligence is written or compiled by McGuireWoods lawyers.