Libor’s End Leaves Nearly $2 Trillion of Debt Facing Legal Limbo

Almost $2 trillion of debt pegged to dollar Libor, much of which can’t easily be shifted to an alternative benchmark, won’t mature until after the discredited rate expires in mid-2023, according to the Federal Reserve-backed group guiding the transition.

As much as $1.6 trillion of securitizations and $300 billion of bonds risk falling into legal limbo in the coming years because they lack provisions necessary to switch to new benchmarks, the Alternative Reference Rates Committee said in a report Monday. New York Governor Andrew Cuomo has proposed legislation in the state’s budget plan to impose fallback rates on so-called tough legacy contracts that fall under state law, while Federal Reserve Chairman Jerome Powell last month said national legislation is needed to ensure a smooth transition.