In this episode, partners Jay Wardlaw and Gordon Peery discuss challenges stemming from the successful adoption of the Secured Overnight Financing Rate (SOFR) and cessation of 24 of 35 settings of the London Interbank Offered Rate (LIBOR).
At the end of 2021, we saw the close of the first phase of LIBOR cessation with the remaining LIBOR settings scheduled to cease at the end of June 2023. Between now and then, market participants are handling legacy contracts (those loans and other agreements referencing LIBOR without addressing its demise), adjusting agreements through negotiation, contending with amendment by state law fiat, and synchronizing related interest rate products like caps and swaps along the way.
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