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On April 6, 2021, New York Governor Andrew Cuomo signed into law
Senate Bill S297B/Assembly Bill 164B (the “New York Legislation”), which paves the way for a smoother transition from US Dollar LIBOR and, in particular, addresses certain “tough legacy contracts”
1 where replacement of LIBOR is not feasible due to certain legal or logistical issues. The New York Legislation is the first federal or state bill in this country signed into law that directly addresses the upcoming cessation of LIBOR.
Background
The ICE Benchmark Administration (“IBA”), the administrator of LIBOR,
released a feedback statement on March 5, 2021, explaining that the IBA would cease publication of LIBOR (i) after December 31, 2021, for one week and two month USD LIBOR, and (ii) after June 30, 2023, for all other USD LIBOR tenors (overnight, one month, three month, six month and twelve month).
In what may be the first step in a move away from the Secured Overnight Financing Rate (SOFR) as the replacement rate for LIBOR, the Loan Syndications & Trading Association (LSTA).
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NEW YORK, April 6, 2021 /PRNewswire/ Bloomberg today announced that an independent assurance review of the Bloomberg Short-Term Bank Yield Index (BSBY) confirmed that the short-term credit sensitive index adheres to the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks. The review was conducted by a global, independent accounting firm and the final report is expected to be available shortly. Alignment with the IOSCO Principles is an important milestone, and recognizes BSBY adheres to industry best practices, said Steve Berkley, CEO of Bloomberg Index Services Limited (BISL) at Bloomberg. An increasing number of financial institutions and corporations are looking to BSBY for their loan products as they transition away from LIBOR, and we will continue to support their needs as they work to ensure compliance with regulatory timelines.
Bloomberg Short-Term Credit Sensitive Index Available for U.S. Loan Market
Bloomberg‘s BSBY Short-Term Credit Sensitive Index Now Available for U.S. Loan Market
New York, NY Bloomberg today announced that the Bloomberg Short-Term Bank Yield Index (BSBY) is now available for use as a reference in financial benchmarks in the U.S. loan market. BSBY includes both a term structure and systemic credit-sensitive spread, which may be used to support the market‘s transition from LIBOR to risk-free rates, such as SOFR. Bloomberg began publishing BSBY on an indicative basis for the purposes of illustration, analysis and collection of market feedback on October 15, 2020.