President Joseph R. Biden signed into law the Consolidated Appropriations Act (the "Act"), which includes the Adjustable Interest Rate (LIBOR) Act.
As previously covered, the LIBOR provisions deal with "tough legacy" contracts that reference LIBOR as an interest rate and do not have adequate contractual language to enable the move away from LIBOR when publishing of the U.S. dollar tenor(s) ceases.
Under Division U of the Act, persons will (i) be able to move away from LIBOR when publishing the U.S. dollar tenors and (ii) have a legal liability "safe harbor" when relying upon the legislation. In addition, the Act provides for uniform treatment of U.S. contracts under federal legislation.
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