SOFR Academy Supports Proposed Extension of USD LIBOR for Legacy Contracts

Proposal Enables a Clear End Date for Certain USD LIBOR Tenors, Ceases New Issuances By End of 2021, and Offers Extension For A Majority of Legacy Contracts

NEW YORK / LONDON: SOFR Academy LLC, a leading education technology and market data provider today released the following statement and in remarks provided to Bloomberg, after the benchmark administrator for the London Inter-Bank Offered Rate (LIBOR) announced its intentions, subject to confirmation following an early December consultation, to cease the publication of the one week and two month U.S. Dollar (USD) LIBOR immediately following the December 31, 2021 publications, and the remaining USD LIBOR tenors immediately following the June 30, 2023 publications. Regulators in the United States and United Kingdom reacted positively today to the proposed path forward for the transition away from USD LIBOR, the benchmark index currently used to determine the interest rate that consumers pay on some credit cards, home equity lines of credit, reverse mortgages, and private student loans.

“We view the strong and coordinated support from policymakers and key organizations in the U.S. and abroad on a path forward as a very positive development for LIBOR transition. This proposal will bring important clarity and certainty for market participants.” said Marcus Burnett, Director of SOFR Academy. “LIBOR is fundamentally flawed. It is incredibly important for consumers and broader market participants that the transition away from LIBOR is orderly and broad based, which is why we have been working with our learners, both individuals and organizations, to equip them with the skills to succeed in a financial ecosystem that is not based on LIBOR. This morning’s announcement, along with the legislative efforts being pursued at the New York state, the U.S. Congress, Her Majesty’s Treasury and in the European Union that will still be required, will provide the suite of necessary solutions to enable the global market to work together in achieving a successful and fair transition.”

The Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation released a joint statement regarding the management of the LIBOR transition. The Federal Reserve welcomed the proposal in a statement from Vice Chair for Supervision Randal K. Quarles, as did the Alternative Reference Rates Committee. Learn more.

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