The Financial Conduct Authority announced on Friday, 5 March 2021 that immediately after 31 December 2021, LIBOR, a key benchmark interest rate setting mechanism, will no longer be available.
A couple of key US Dollar LIBOR tenors will remain for a further 18 months.
The LIBOR rate has been withdrawn due to major manipulation scandals and concerns about its unsuitability for the widespread reliance placed upon it by financial markets.
Interest on many existing loans are still calculated by reference to LIBOR. All LIBOR-based loans must move to an alternative interest rate and Lenders now only have months to finalise and implement their transition strategies.
We expect the majority of lenders will start to communicate to borrowers what the LIBOR transition will mean in the near future. Clearly there is a lot of work to be done to complete transitions to a new interest rate by the end of 2021.
Mills Selig can help.
Having the right legal advice at the right time is crucial. Our expert team offers clear, concise and problem solving legal advice on changes to existing interest rates that depend on LIBOR.
Please do not hesitate to get in touch with Naomi Gaston in our banking team to discuss.
Editorial prepared by: Naomi Gaston, Senior Associate
For further information on Mills Selig’s expert legal services and how we can help your organisation, click: www.MillsSelig.com/Expertise
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