LIBOR Transition

Overview

Friedman Kaplan has formed a cross-disciplinary LIBOR Transition Task Force to study and prepare for the cessation of the London Interbank Offered Rate (LIBOR). For decades, LIBOR has been a key benchmark used in a variety of financial products, and it will be permanently discontinued as of June 30, 2023 (with some tenors to be discontinued at the end of 2021). Given LIBOR’s longstanding, pervasive use, the consequences of its permanent discontinuation will be felt – for better or worse – throughout the financial markets.

The decision by the UK Financial Conduct Authority to phase out the use of LIBOR as a benchmark rate was said to be driven primarily by concerns for financial stability, given the severely reduced volume of predicate transactions among LIBOR panel banks. How LIBOR will be replaced and by what rate(s) varies by jurisdiction. Also complicating the transition is the treatment of so-called “tough legacy” contracts, which lack adequate – and in some cases, any – provision for a fallback rate upon a permanent discontinuance of LIBOR and cannot practicably be amended.

Led by litigation partner Anne Beaumont and comprised of Friedman Kaplan litigation, white collar, and corporate attorneys, our LIBOR Transition Task Force helps clients:

• understand the legal, compliance, business, and operations implications of LIBOR transition and develop strategies to address LIBOR-related exposures and transactions in advance of the benchmark’s discontinuance;
• identify possible friction points and areas of dispute in legacy LIBOR-linked transactions, develop mitigation strategies, where possible, and litigate claims and disputes, where necessary; and
• by providing advice in connection with new and existing credit, lending, and other business agreements referencing LIBOR to ensure they include appropriate fallback and other provisions.