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Phase-Out of LIBOR: Implementing Replacement Rates for Floating Rate Loans and Derivatives

Recording of a 90-minute premium CLE video webinar with Q&A

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Conducted on Thursday, December 2, 2021

Recorded event now available

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This CLE webinar will discuss the scheduled phase-out of LIBOR (London Interbank Offered Rate) at the end of 2021. The panel will address alternative rates and provisions recommended by the Alternative Reference Rate Committee (ARRC) of the Federal Reserve Bank of New York and the steps that lenders and finance counsel should take to amend existing transaction documents and manage new transactions. The panel will also discuss the impact on swaps and other derivatives and evaluate alternative rate language in ISDA documents.


The UK's Financial Conduct Authority announced in July 2017 that it would stop requiring reference banks to quote LIBOR (the London Interbank Offered Rate) by the end of 2021. On Mar. 5, 2021, they confirmed the end dates for the transition away from LIBOR, which for most LIBOR-based instruments--loans, bonds, derivatives, and other financial contracts--will be June 30, 2023. Counsel must contemplate the phase-out when drafting agreements and reviewing existing contracts.

Alternative reference rate language varies from transaction to transaction, and in some cases, will need to be added or modified to account for the LIBOR phase-out. Counsel should review credit documents with a term beyond 2021 to ensure appropriate fallback language, including the triggers for switching to an alternative reference rate and the mechanics for choosing an alternative reference rate.

The ARRC has proposed using the Secured Overnight Financing Rate (SOFR), a broad-based Treasury repo financing rate published daily since Apr. 3, 2018, as a replacement rate, and has proposed fallback language for syndicated business loans, bilateral business loans, and floating-rate notes. However, questions remain regarding industry acceptance and how best to transition from LIBOR to SOFR, and whether other replacement rates are more appropriate, in existing and proposed transactions.

Listen as our authoritative panel discusses the impact of the LIBOR phase-out on various commercial and consumer loans and derivatives transactions. Our group will discuss the potential approaches for mitigating these changes' uncertainty, including using SOFR as a substitute rate. The panel will also discuss how ISDA is addressing the phase-out.



  1. LIBOR: reasons and timeline for phase-out
  2. Impact on commercial lending: floating-rate transactions
  3. Effect on derivatives
  4. Alternative rates
  5. Recommended provisions contemplating a change in reference rate under loan agreements
    1. Amendment approach
    2. Hardwired approach
  6. Determining whether to amend financial contracts


The panel will review these and other critical issues:

  • What is the timeline for LIBOR's phase-out?
  • What are the issues with alternative rate language currently contained in loan documents?
  • How should floating rate forms be revised to address the phase-out and the use of SOFR or another index as a substitute rate?
  • What should counsel look for in ISDA agreements to confirm a suitable alternative rate?
  • What is SOFR and how does it compare to LIBOR?
  • What other replacements indices are market participants considering, including BSBY, Ameribor, and Prime?


Aaron, Cheryl
Cheryl L. Isaac

Michael Best & Friedrich

Ms. Isaac represents financial institutions, energy companies, and commodity trading firms (including both end-users...  |  Read More

McLaughlin, Robert
Robert M. McLaughlin

Of Counsel
Fried Frank Harris Shriver & Jacobson

Mr. McLaughlin is a corporate partner resident in Fried Frank’s New York office, where he is a member of the...  |  Read More

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