LIBOR, the benchmark rate for which there is currently over $200 trillion in USD LIBOR outstanding exposure alone, will cease to be published after mid-2023, with the majority of tenors being discontinued by December 31, 2021. Our Team is focused on monitoring the ever-changing landscape and advising clients on the impact associated with LIBOR cessation.
Jane O’Brien Discusses SOFR as a LIBOR Alternative in S&P Global Market Intelligence
March 2, 2022
Litigation partner Jane O’Brien appeared in an article in S&P Global Market Intelligence on the transition to alternative interest rate benchmarks in light of the retirement of LIBOR, the London Interbank Offered Rate. In the article, “Banks Adopting Alternative Rates, Managing Old Contracts as LIBOR Usage Fades,” Jane discusses the rationale behind the adoption of SOFR, or the secured overnight financing rate, as an alternative to LIBOR.
"There's sort of inherent skepticism about a rate that has been based on a relatively small number of transactions but is carrying the weight of a huge amount of reference transactions, if you will. I think that was really perceived to be the fundamental flaw with LIBOR,” Jane told S&P Global. “The volume of transactions that go into calculating SOFR is so enormous that there's a comfort that it's based on real, identifiable transactions as opposed to more speculative, a small number of transactions."