The London Interbank Offered Rate (LIBOR) is going away. Given the vast quantity and array of financial transactions that are subject to LIBOR, and the fact that LIBOR is embedded in critical financial and treasury management processes and systems, the work required to be done by the financial services industry, corporates and other market participants is extensive. While COVID-19 has exacerbated the situation by diverting management resources to pandemic-related areas, not even a pandemic will delay this transition.
We specifically designed a guide for corporates entitled, How Best to Navigate the LIBOR Transition: Challenges and Solutions for Corporate Treasurers and CFOs, where we discuss five key steps for a successful transition. While other steps are most certain to arise in the course of transition-related work (a checklist of other key tasks is provided here), we believe these five steps set the stage for proper and thoughtful engagement by those within the corporate treasury and financial function to successfully advance a firm’s transition away from LIBOR.
Our expert team of cross-sector and cross-practice lawyers can help clients navigate through the transition.
TRANSITION TIMING CONSIDERATIONS
December 31, 2021 – Stop using USD LIBOR for new contracts and instruments by this date or earlier if practicable.
June 30, 2023 – Legacy contracts that reference USD LIBOR should have matured, been refinanced, or otherwise been remediated by this date.