Alston & Bird has formed a working group to assist companies in the U.S. and globally in managing the transition from LIBOR (London Interbank Offered Rate) and addressing the risks presented by the expected discontinuation of this major benchmark interest rate after 2021.
Spanning several Alston & Bird practices – including structured and corporate debt finance, financial services, litigation, real estate finance, and consumer financial services – the LIBOR Transition Task Force is led by partners Aimee Cummo, John Doherty, and Paul Hespel; counsel Blake Estes (New York); partners Mark Harris (Dallas), John Baron, Bill Macurda and Jason Solomon (Charlotte), Andrew Petersen (London), and Nanci Weissgold; director Gabriel Walsh (Washington, D.C.); and partner Courtney Wright (Los Angeles).
“LIBOR is used extensively as a benchmark in determining lending terms on more than $200 trillion in various U.S. commercial and financial contracts, including corporate and municipal bonds and loans, floating rate mortgages, asset-backed securities, consumer loans, and interest rate swaps and other derivatives,” said Cummo. “The transition from LIBOR will be seismic, and as formidable as it is now, imagine how much more challenging it will be six months or a year from now when the clock begins to run out.”
The new task force will help companies map out a sound and strategic path by identifying impediments to transition and, equally, identifying where there are opportunities.
Key areas of focus for the task force include advising companies on managing the transition from legacy deals and updating new financial contracts using the market’s adopted LIBOR transition mechanics, preparing for litigation risks of transitioning from LIBOR to one of its successors, and addressing benchmark transition across jurisdictions, including the International Swaps and Derivatives Association, Structured Finance Association (Structured Finance Industry Group), Loan Syndications and Trading Association, Securities Industry and Financial Markets Association, and Alternative Reference Rates Committee.