February 11, 2021 - With recent announcements around LIBOR cessation, it can be hard to keep all the deadlines straight. For this reason, the LSTA created a simple USD LIBOR Cessation Timeline (click here for helpful graphic). There are four key dates to remember: 1Q21, 6.30.21, 12.31.21 and 6.30.23. We review each of them below.
- 1Q21: FCA/IBA Announcements on LIBOR cessation and/or non-representativeness expected. When these announcements occur, the LIBOR fallback spread adjustments will be set, but LIBOR transition will not begin. Agents may have to send notices to borrowers and lenders.
- 6.30.21: ARRC Recommended Date for ceasing USD LIBOR-based loan originations. The ARRC Best Practice Recommendations state that banks should cease LIBOR loan originations. This is an influential recommendation, but is not binding.
- 12.31.21: Non-USD LIBOR settings expected to cease and those contracts must transition to replacement rates. 1W/2M USD LIBOR settings expected to cease. US Banking Agencies have said that banks should stop originating LIBOR contracts as soon as practicable, but in any event, no later than 12.31.21. The year-end date should be seen as binding.
- 6.30.23: Remaining USD LIBOR settings cease to be published. Outstanding USD LIBOR contracts must transition to replacement rate.