On April 17, the ARRC released a set of key objectives for 2020 that the ARRC has set for itself to support the voluntary use of SOFR as an alternative to USD LIBOR. The ARRC stated that its objectives were developed keeping in mind the current expectation that LIBOR can no longer be guaranteed beyond the end of 2021, noting that this timeline was recently reinforced by the UK FCA in a statement released in the context of dislocations surrounding the coronavirus.
Continue Reading ARRC Announces Key Objectives for 2020

On April 8, the ARRC announced that it had agreed on a recommended spread adjustment methodology for cash products referencing USD LIBOR.

The ARRC’s recommended methodology is intended for use in for USD LIBOR contracts that have incorporated the ARRC’s recommended hardwired fallback language or for legacy USD LIBOR contracts where a spread-adjusted SOFR can

On March 2, 2020, the Federal Reserve Bank of New York (the “New York Fed”), as administrator of SOFR, began publishing 30-, 90-, and 180-day SOFR Averages as well as a SOFR Index.

The SOFR Averages for a given publication date incorporate all the SOFR values starting exactly 30-, 90-, and 180-calendar days before the publication date, regardless of whether or not that date is a weekend or holiday, and extend through the SOFR published that day.Continue Reading Federal Reserve Bank of New York Announces Publication of SOFR Averages and Index

Potential New York State Legislation

The AARC has proposed a potential legislative solution aimed to reduce the adverse economic outcomes of legacy LIBOR fallbacks in contracts governed under New York law for all asset classes. (New York law is the chosen governing law for many financial agreements that use LIBOR as a reference.)  Such legislative solutions proposals were discussed at certain AARC meetings in 2019, but the proposal took more detailed form recently.  On March 6, 2020, the ARRC proposed legislation that would apply the ARRC-recommended benchmark replacement (SOFR) on both a mandatory and statutory basis, and contained provisions designed to limit litigation arising from the benchmark replacement.Continue Reading Possible Legislative Solutions for Existing US LIBOR Products

On January 31, 2020, the ARRC released a vendor survey and a buy-side checklist. Both documents were developed by the ARRC’s Operations/Infrastructure Working Group and, according to the ARRC, are intended to support market participants’ work to address operational challenges in the transition from USD LIBOR to SOFR. The survey serves as a self-assessment tool