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ARTICLE · 16 JUNE 2020

ARRC Announces Best Practices For Completing Transition From LIBOR

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On May 27, 2020, the Alternative Reference Rates Committee (ARRC) published best practices for completing the financial industry's transition away from U.S. dollar (USD) LIBOR

United StatesFinance and Banking
Donna Parisi
Donna Parisi
Geoffrey Goldman
Geoffrey Goldman
Azam Aziz
Azam Aziz
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On May 27, 2020, the Alternative Reference Rates Committee (ARRC) published best practices for completing the financial industry's transition away from U.S. dollar (USD) LIBOR.1 With 19 months remaining before the anticipated cessation of USD LIBOR at the end of 2021, the ARRC's recommendations should provide market participants with further guidance as they continue to prepare for the transition.

Background

Since 2016,2 the ARRC has been conducting research and analysis in an effort to prepare the financial industry for the likely cessation of USD LIBOR. In doing so, the ARRC has, among other things, (1) published a Paced Transition Plan3 that outlines a number of key steps that should be taken to restructure cash products that reference USD LIBOR; (2) recommended the Secured Overnight Financing Rate (SOFR)4 as the alternative reference rate to USD LIBOR; (3) proposed a New York state legislative solution5 for amending legacy contracts that reference USD LIBOR

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