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ARTICLE · 01 FEBRUARY 2021

Libor Discontinuation: Update For Floating Rate Borrowers

Holland & Knight
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This alert provides a brief summary of a recent development that may impact borrowers that hedge floating rate debt.

United StatesFinance and Banking
Douglas Youngman
Douglas Youngman
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This alert provides a brief summary of a recent development that may impact borrowers that hedge floating rate debt. As discussed in more detail in Holland & Knight's previous alert, the International Swaps and Derivatives Association Inc. (ISDA) published its 2020 IBOR Fallbacks Protocol (the Protocol) and related Amendments to the 2006 ISDA Definitions (the Amendments) in October 2020 to address discontinuation of Libor in the derivatives markets. The Amendments became effective on Jan. 25, 2021.

What Does This Mean?

Starting on Jan. 25, 2021, any new swap or other derivative transactions which reference the 2006 ISDA Definitions will automatically incorporate ISDA's fallback provisions for the replacement of Libor. As a result, upon the occurrence of certain objective trigger events related to the discontinuation of Libor (anticipated to be delayed until June 2023), the floating rate on these new swaps will convert from Libor to ISDA's preferred

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