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Final Phaseout of LIBOR: Amending Legacy Instruments, Fallback Language, Applying SOFR and Spread Adjustments

Adjustable Interest Rate (LIBOR) Act, LSTA Amendment Forms

An encore presentation.

Recording of a 90-minute premium CLE video webinar

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Conducted on Tuesday, April 25, 2023

Recorded event now available

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This CLE webinar will discuss the scheduled phaseout of LIBOR (London Interbank Offered Rate) and outline steps finance counsel must take now to amend existing credit agreements tied to LIBOR to transition appropriately to a new benchmark rate. The panel will discuss issues to consider in implementing an alternative rate and best practices for incorporating fallback language into those legacy agreements as well as form documents for future transactions. The panel will also discuss the Adjustable Interest Rate (LIBOR) Act and the legacy contracts to which it applies and the potential impact of the publication of synthetic LIBOR for one, three, and six month LIBOR, which now seems likely.


All remaining U.S. dollar LIBOR tenors will end or become nonrepresentative on June 30, 2023. While LIBOR has generally been phased out for new originations, much of the U.S. loan market is still comprised of legacy transactions that remain tied to LIBOR. Finance counsel must understand the replacement rate landscape when amending loan documents.

The parameters for transitioning a LIBOR-based loan facility to an alternative benchmark vary across credit agreements. SOFR is now available in various forms, but the credit spread adjustment (CSA) added to SOFR is negotiable. Banks are not required to use SOFR, and some are considering alternatives, including "credit-sensitive" rates that include some measure of the cost of unsecured borrowing. Many credit agreements require the parties to agree on the choice of replacement benchmark, negotiate the inclusion of a CSA, and/or obtain affirmative or negative consent from a syndicate of lenders.

The Adjustable Interest Rate (LIBOR) Act, signed into law on Mar. 15, 2022, establishes a national framework for replacing LIBOR in contracts lacking adequate fallback provisions. The Federal Reserve recently promulgated rules to provide additional details necessary to implement the Act.

Amendment forms published by the Loan Syndications and Trading Association (LSTA) operate as a one-size-fits-all document that overrides existing LIBOR provisions with SOFR provisions contained in the forms. This approach is expedient but requires reading the existing LIBOR based instrument together with the separate LSTA document.

Listen as our authoritative panel discusses the timing and impact of the LIBOR phaseout, the use of SOFR and other alternative rates, and the remaining transition challenges. The panel will explain the new federal law and the "tough legacy contracts" to which it applies, and appropriate uses for the LSTA amendment forms.



  1. LIBOR: timeline for the phaseout
  2. Alternative reference rates
    1. ARRC recommended SOFR and term SOFR rates by product
    2. Credit-sensitive alternatives
  3. Spread adjustments
  4. Impact on loans
    1. Timing of amendments and rate switch
    2. Next steps for loans that incorporated the ARRC recommended fallback provisions
    3. Basis risk
  5. The Adjustable Interest Rate (LIBOR) Act
    1. Federal Reserve rules implementing LIBOR Act
    2. Impact on securities
    3. Impact on loans
    4. Synthetic LIBOR
  6. LSTA amendment forms
  7. Implementation challenges


The panel will review these and other key issues:

  • Where are we in the transition process and what are the key focus areas?
  • What do you need to know about the myriad of alternative rates?
  • What should your clients consider in addressing the timing and process of amending legacy instruments?
  • How does the Adjustable Interest Rate (LIBOR) Act address contracts without fallback provisions?
  • What does the likely publication of synthetic LIBOR mean for loans not covered by the LIBOR Act?

An encore presentation.


Williams, Amy
Amy McDaniel Williams

Hunton Andrews Kurth

Ms. Williams is Chair of the firm’s Opinion Committee, Audit Response Committee and Ethics in Marketing...  |  Read More

Locatelli, Tina
Tina Locatelli

Hunton Andrews Kurth

Ms. Locatelli is a seasoned lawyer whose current practice focuses on structured and corporate finance.

 |  Read More

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