Federal LIBOR Transition Legislation Passed In Omnibus Spending Package

On March 15, 2022, President Joe Biden signed into law the Consolidated Appropriations Act, 2022, which includes the Adjustable Interest Rate (LIBOR) Act (the "Act"). The newly passed law facilitates the transition away from the London Interbank Offered Rate (LIBOR). For U.S. dollar loans, LIBOR will not be available after June 2023 (two-month and one-week interest periods ceased in December 2021). Trillions of dollars of financial contracts reference LIBOR as a benchmark for prevailing interest rates and for calculating certain payments and obligations. Many of these agreements, particularly large syndicated loan agreements, contain fallback or replacement rates that will allow the agreement parties to determine interest after LIBOR's retirement. Many other agreements, however, have no fallback or replacement rate, making interest impossible to determine. The Act includes: