On Oct. 14, 2021, the Alternative Reference Rates Committee (“ARRC”) recommended that all market participants act to slow their use of USD LIBOR and use the next six weeks as a key window to reduce such activity to promote a smooth end to new LIBOR contracts by the end of 2021. The ARRC noted that, as a result of supervisory guidance from regulators which encourages market participants to cease entering into new contracts that reference USD LIBOR as a reference rate, USD LIBOR's liquidity and usefulness will likely diminish as new use comes to an end. The ARRC continues to recommend the Secured Overnight Financing Rate (“SOFR”) as its selected alternative reference rate. The ARRC believes that proactive reductions in new USD LIBOR contracts should apply across markets and across the full range of derivatives and cash products, including but not limited to syndicated and bilateral loans, and recognizes that firms may be at different stages in their transition plans, but that all market participants should be ready for the year-end U.S. supervisory guidance deadline.

Key Publication

The ARRC Recommendation