News

House Passes LIBOR Legislation

December 8, 2021

6:10 PM ET -- Moments ago, the House of Representatives passed the ‘‘Adjustable Interest Rate (LIBOR) Act of 2021,” H.R. 4616 by 415 to 9 margin. Rep. Brad Sherman (D-CA) is the lead sponsor of the bipartisan bill. Click this link for a copy of the latest text of the bill.

The legislation, supported by CREFC and other National Real Estate Organizations (NREOs), establishes a clear and uniform process to replace LIBOR in existing contracts (known as tough legacy contracts) whose terms do not provide for a LIBOR replacement rate. The legislation does not affect the ability of parties to use any appropriate benchmark rate in new contracts.

“CREFC applauds the House’s action and thanks Rep. Sherman for leading the bipartisan effort to solve this important piece of the LIBOR transition,” Lisa Pendergast, CREFC’s Executive Director said in a statement. “Federal legislation gives more certainty for everyone in the market, and we urge the Senate to act swiftly to send the legislation to the President’s desk.”

Ahead of the House vote, CREFC and 21 other trade organizations sent a letter of support to Speaker Nancy Pelosi and Republican Leader Kevin McCarthy highlighting the necessity of federal action for tough legacy contracts:

Without federal legislation to address these contracts, investors, consumers, and issuers of securities may face years of uncertainty, litigation, and a change in value. This would thereby create ambiguity that would lead to a reduction in liquidity and an increase in volatility.
Over in the Senate, Jon Tester (D-MT) and Thom Tillis (R-NC) are working to find a path forward to pass the legislation before yearend.

Please contact Raj Aidasani or Sairah Burki with questions about the LIBOR transition. For questions on the status of the legislation, please contact Justin Ailes.

Contact

Raj Aidasani
Senior Director, Research
646.884.7566
raidasani@crefc.org
Justin Ailes
Managing Director, Government Relations
202.448.0853
jailes@crefc.org
Sairah Burki
Managing Director, Regulatory Affairs
703.201.4294
sburki@crefc.org
Ahead of the House vote, CREFC and 21 other trade organizations sent a letter of support to Speaker Nancy Pelosi and Republican Leader Kevin McCarthy highlighting the necessity of federal action for tough legacy contracts.
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2021 CRE Finance Council. All rights reserved.

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