Recent announcements by regulators in the United States and United Kingdom provided strongly worded reminders to banks and other entities they supervise that the London interbank offered rate for the U.S. dollar (USD LIBOR) will soon be discontinued or declared unrepresentative. One-week and two-month USD LIBOR—as well as all non-USD LIBOR tenors—will cease publication immediately after December 31, 2021. Three-month, six-month, and one-year USD LIBOR will cease publication after June 30, 2023.

In anticipation of the benchmark's cessation, regulators warned entities to avoid taking on new LIBOR exposure except in very limited circumstances.¹ These announcements make it abundantly clear that entities and other market participants that have engaged in (or continue to engage in) loans, floating-rate notes, securitizations, supplier contracts, and/or other financial instruments that reference USD LIBOR should already be well on their way away from the benchmark. Actions recently taken by other regulators, regulator-sponsored groups such as the Alternative Reference Rates Committee (ARRC), and trade associations emphasize this imperative.