LIBOR Transition Resources
On March 5, 2021, the UK Financial Conduct Authority (FCA) announced the upcoming cessation of all LIBOR settings. The cessation of LIBOR is now clear, and regulators and industry groups have emphasized that market participants should stop using LIBOR in new transactions and should, to the extent possible, transition legacy LIBOR-linked transactions to alternative reference rates.
In the case of 1-week and 2-month US dollar LIBOR, publication will cease immediately after December 31, 2021 and, in the case of overnight and 12-month US dollar LIBOR, publication will cease immediately after June 30, 2023. 1-month, 3-month, and 6-month US dollar LIBOR will either be discontinued or become non-representative after June 30, 2023 and publication of these three reference rates as a non-representative “synthetic” rates after June 30, 2023, will be under consideration.
The transition away from LIBOR is well underway, affecting FHLBank San Francisco, our members, and other market participants that use instruments with components tied to LIBOR. As a result of the FCA’s end of LIBOR announcement financial market participants have the required clarity to execute their LIBOR transition plans.
The Secured Overnight Financing Rate (SOFR) is the alternative rate recommended by the Alternative Reference Rates Committee (ARRC). The Federal Reserve Bank of New York publishes SOFR rates daily.
FHLBank San Francisco's LIBOR/SOFR FAQ
News and Announcements
Freddie Mac Announces Replacement Rates for its Legacy LIBOR Contracts (December 22, 2022)
Fannie Mae Announces Replacement Rates for Legacy LIBOR Products (December 22, 2022)
The Fed published its final rule implementing the LIBOR Act (December 16, 2022) and provided a summary memo to the Board of Governors of the Federal Reserve System (December 2, 2022)
ARRC announces best practices for use of forward-looking Term SOFR (August 27, 2022)
ARRC Welcomes Passage of Federal LIBOR Transition Legislation in Omnibus Spending Package (March 15, 2022)
ARRC Releases Summary of its Spread-Adjusted Fallback Recommendations (October 26, 2021)
ARRC Formally Recommends Term SOFR (July 29, 2021)
ARRC Endorses Decision to Sign New York State LIBOR Legislation into Law (April 7, 2021)
ARRC Confirms "Benchmark Transition Event" (March 8, 2021)
ISDA Statement on UK FCA LIBOR Announcement (March 5, 2021)
FCA announcement on future cessation and loss of representativeness of the LIBOR (March 5, 2021)
AARC Guide on the Endgame for USD Libor (December 7, 2020)
ICE LIBOR® Consultation on Potential Cessation (December 4, 2020)
What You Need to Know About The Libor Transition (Politico Pro September 2020)
Fannie and Freddie Helping Secondary Market with LIBOR Transition (May 29, 2020)
Fannie Mae Announces LIBOR Transition Webpage (May 28, 2020)
ARRC Recommended Best Practices for Completing the Transition from LIBOR (May 27, 2020)
FHFA Instructs FHLBanks to Begin Transitioning Away from LIBOR (September 27, 2019)
FHLBanks Office of Finance: SOFR Issuance hits $100 billion (August 21, 2019)
ISDA: Bloomberg Selected as Fallback Adjustment Vendor (July 31, 2019)
SEC: Staff Statement on LIBOR Transition (July 12, 2019)
Fannie Mae: Statement on ARRC's SOFR Adjustable Rate Mortgage Framework (July 11, 2019)
BIS: Beyond LIBOR: A primer on the new benchmark rates (March 5, 2019)
Resources
LIBOR/SOFR transition timeline (ARRC)
ARRC: Practical Implementation Checklist for SOFR Adoption
ARRC: Fallback Contract Language
Alternative Reference Rates Committee (ARRC)