Phaseout of LIBOR: Navigating the Final Stages, Implementing Alternative Reference Rates, and Fallback Language
Recording of a 90-minute premium CLE video webinar with Q&A
This CLE course will discuss the scheduled phaseout of LIBOR (London Interbank Offered Rate) and outline steps real estate and commercial finance counsel must take now to ensure that agreements tied to LIBOR transition appropriately to a new benchmark rate. The panel will discuss how the recent announcements by IBA and FCA created certainty about the timing of LIBOR's end, and fixed the spread adjustments to be added to the recommended replacement rates. The panelists also will contrast the fallback benchmark rates recommended by the Alternative Reference Rate Committee (ARRC) with other benchmark rates that some are considering adopting instead. In addition, the panel will discuss best practices for analyzing legacy agreements and incorporating fallback language into those legacy agreements, as well as incorporating appropriate alternative rate language into form documents for future transactions. The discussion also will touch on the problems with "tough legacy contracts" and the New York and proposed federal legislation designed to tackle this problem.
Outline
- LIBOR: recently announced timeline for the phaseout
- Spread adjustment announcements
- Impact on floating rate transactions
- Impact on securitized loans
- Alternative reference rates: SOFR, credit-sensitive alternatives
- Recommended ARRC fallback provisions contemplating a change in reference rate under loan agreements
- Amendment approach
- Hardwired approach
- Supplemental recommendations made in response to "hard" end dates for LIBOR
- Recently passed NY legislation and proposed federal legislation designed to smooth transition for tough legacy contracts
Benefits
The panel will review these and other key issues:
- What is the timeline, and what kinds of transactions will be impacted by the phaseout of LIBOR?
- What are the issues with alternative rate language currently contained in floating rate loan documents?
- What alternatives should counsel's clients consider in addressing the transition?
- How should the floating rate forms be revised to address the transition given the current uncertainty as to the substitute rate?
- What help is there for "tough legacy contracts" that cannot be amended?
Faculty
Neal R. Pandozzi
Senior Counsel
Adler Pollock & Sheehan
Mr. Pandozzi is Co-Chair of the firm’s Public Finance group. He has drafted primary financing documents,... | Read More
Mr. Pandozzi is Co-Chair of the firm’s Public Finance group. He has drafted primary financing documents, including master indentures, loan and trust agreements, lease agreements, official statements, purchase contracts, blue sky memoranda, resolutions, closing certificates, legislation, and opinions. Mr. Pandozzi has served as bond counsel, disclosure counsel, borrower’s counsel, underwriter’s counsel, trustee’s counsel, and lender’s counsel in a wide variety of bond transactions. He has also represented clients in various corporate and business matters, including mergers and acquisitions, commercial finance, corporate formation and governance, contract negotiations and affordable housing transactions.
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Amy McDaniel Williams
Partner
Hunton Andrews Kurth
Ms. Williams is Chair of the firm’s Opinion Committee, Audit Response Committee and Ethics in Marketing... | Read More
Ms. Williams is Chair of the firm’s Opinion Committee, Audit Response Committee and Ethics in Marketing Committee, as well as the firm’s Uniform Commercial Code Subcommittee. She is a seasoned structured finance lawyer who has represented both borrowers and lenders in structuring and closing asset-based finance transactions involving a variety of assets, including residential and commercial loans, servicing advances, servicing rights, RMBS and CMBS. Ms. Williams has represented Ginnie Mae since she helped develop its multiclass program in the early 1990s. She assists a variety of clients in transactions involving government-insured loans and the GSEs, including warehouse financings, early buy-out transactions and MSR financings. Ms. Williams helps clients modernize their programs, including advising about LIBOR transition and the trend of moving toward electronic mortgages, e-notes, and hybrid mortgage closings.
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