Tuesday, May 4, 2021
This is a supplement to our prior articles regarding the phasing out of LIBOR (see “LIBOR Is Fading Away” and “LIBOR Is Fading Away; But, Perhaps, Not as Quickly as Thought“). For decades, lenders have extended credit facilities, both large and small, using LIBOR-based interest rates and documents relating to these facilities. “LIBOR” (the acronym for the London Interbank Offered Rate) has served as a premier benchmark for short-term (overnight to one year) interest rates around the world.
LIBOR Fading Away
On March 5, 2021, the UK Financial Conduct Authority (FCA) announced the timing for the cessation of all 35 LIBOR settings at once. In particular, one-week and two-month U.S. dollar LIBOR settings will permanently cease immediately after December 31, 2021. Publication of the overnight, one-month, three-month, and 12-month U.S. dollar LIBOR settings will permanently cease immediately after June 30, 2023.