On March 15, President Biden signed, as part of a larger appropriations act, legislation known as the “Adjustable Interest Rate (LIBOR) Act,” which addresses “tough legacy” contracts that do not provide for the use of clearly defined or practicable replacement benchmark rates when LIBOR is discontinued. This development was welcomed by the market as it inches towards LIBOR discontinuation. Although certain states – most notably New York – have passed or are considering passing similar legislation, this federal legislation expressly supersedes “any provision of any State or local law, statute, rule, regulation, or standard” and establishes a uniform process, on a nationwide basis, for replacing LIBOR in tough legacy contracts.

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