March 11, 2022 - Late Thursday night, the federal LIBOR legislative solution (as contained in Consolidated Appropriations Act, 2022) was passed by the Senate and a successful passage by the House on Wednesday. This is a huge win for the financial markets. The legislation addresses financial contracts that mature after the permanent cessation of LIBOR with no workable fallbacks. While the legislation is not expected to be significant for loans, it represents the only workable solutions for many contracts, including certain securitizations. The bill itself is modeled on the New York State LIBOR legislation which successfully passed last spring. While New York law governs many financial contracts, market participants now have certainty that contracts governed by the laws of any U.S. state will have relief.

The omnibus spending package (of which the LIBOR legislation is a part) is now awaiting presidential approval.