Now that the formal end dates for LIBOR have been announced
by the FCA,
it's time to consider some of the practical implications
of the announcement. With the original end date scheduled for
the end of 2021, many in the market breathed a collective sigh of
relief at the possibility of an extension of the deadline. Among
all the other complicated tasks to be completed before LIBOR's
demise, getting borrowers, many of which are oblivious to the
coming change, to amend the millions of legacy loans originated
before the end of LIBOR was even contemplated is a particularly
daunting one.
Although the 1-week and 2-month US dollar LIBOR tenors will
still end on December 31, 2021, the 1-month, 3-month and 6-month
LIBOR tenors used in the majority of loans will now end on June 30,
2023. By design, this extension has a number of effects. First, it
reduces the number of legacy loans that will need to be amended to
replace LIBOR, since some of those loans will expire by their
