LIBOR/SOFR Transition and the Impact of the Adjustable Interest Rate (LIBOR) Act
The end to the publication of USD LIBOR is less than a year away. The Federal Government passed the Adjustable Interest Rate (LIBOR) Act, and in July 2022 the Federal Reserve proposed effectuating regulations, intended to address the discontinuation of USD LIBOR by setting up SOFR-based fallback benchmarks for certain agreements utilizing LIBOR. Banks should be aware of the different SOFR-based benchmarks proposed by the Federal Reserve, the types of contracts and in what circumstances each fallback benchmark will be applicable, how the fallback benchmarks differ from the LIBOR benchmarks they are replacing and what options banks may have to chart their own path in the transition.
Zachary Davis, Esq.
Luse Gorman, PC