The LIBOR Transition

Presenters:

Howard Altarescu Orrick, Partner

Joyce Frost Riverside Risk Advisors, Co-founder & Partner

Nikiforos Mathews Orrick, Partner

Categories:

Finance

Program Level: Advanced

Duration: 60 minutes

Recorded On: January 15, 2020

Program Description

LIBOR has for many years been the reference rate used to establish interest rates on loans, notes, bonds and other financings, swaps and other derivatives, and in purchase agreements and other contracts. As a result of both manipulation of the rate by LIBOR panel banks, and that there are today far fewer inter-bank financings on which to base quotes, the LIBOR regulator has announced that it will no longer require banks to provide quotes on which LIBOR is based after the end of 2021. Efforts are now underway to select an alternative reference rate and arrive at a consensus on appropriate adjustments to that rate, and to help ensure a successful transition from LIBOR to the alternative rate.

To facilitate the transition in the U.S., the Alternative Reference Rates Committee (the “ARRC”) has made recommendations for the alternative reference rate and related provisions to be included in Bilateral Business Loans, Floating Rate Notes, Securitizations, Syndicated Loans and Adjustable Rate Mortgages, and additional guidance has also been provided. ISDA has taken the lead in facilitating the transition in the derivatives market. While there are many challenges associated with the prospective end of 2021 LIBOR transition, one of the most daunting challenges has to be the impact of the prospective transition on outstanding financings and other contracts (“legacy instruments”). The ARRC has under consideration legislation proposals to address issues for certain of the legacy instruments.

The background, recommendations, challenges and issues related to the LIBOR transition, new financings and legacy instruments are included in our discussion.

Learning Objectives

At the end of this session, participants will be able to:

  • Evaluate the legal challenges likely to be presented in connection with the LIBOR transition for legacy instruments;
  • Consider and evaluate the remediation alternatives for legacy instruments; and
  • Be prepared to assess the alternative considerations for new floating rate financings.
CLE Info

This program is currently available for 1.0 general credit in the following states:

Alabama
Alaska
Arizona
Arkansas
California
Connecticut
Georgia
Hawaii*
Illinois
Mississippi
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Nevada
New Hampshire
New Jersey*
New Mexico
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In addition, we have applied for credit in the following states, and will promptly update the list above as the program is approved in each such state:

Colorado
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*In Hawaii and New Jersey, we rely on their reciprocity policies pursuant to which our programs are deemed accredited once they are approved in the various reciprocity states where we apply such as California, Illinois, New York, Pennsylvania and Texas.

For information on attendance reporting, please refer to the CLE Info page.

Presenters:

Howard Altarescu
Partner, Orrick

Joyce Frost
Co-founder & Partner, Riverside Risk Advisors

Nikiforos Mathews
Partner, Orrick

Categories:

Finance

Program Level: Advanced

Duration: 60 minutes

Recorded On: January 15, 2020