ICE Finalizes Plans to Cease Publishing U.S. Dollar Libor

Intercontinental Exchange, which administers the London Interbank Offered Rate, today finalized plans to cease publishing U.S. dollar Libor after the end of 2021. Under the plan—which was proposed for comment in December 2020—ICE will stop publishing the one-week and two-month settings of USD Libor immediately after Dec. 31, 2021, and cease publishing remaining Libor settings on June 30, 2023. This move is expected to provide time for most legacy Libor-referencing contracts to mature. The pound sterling, euro, Swiss franc and Japanese yen tenors of Libor will also cease after Dec. 31, 2021. The long-expected move by ICE comes as part of the broader industry transition away from Libor toward more robust alternative rates.

The move from ICE constituted an “index cessation event” under the protocol of the International Swaps and Derivatives Association. “As a result, the fallback spread adjustment published by Bloomberg is fixed as of the date of the announcement for all euro, sterling, Swiss franc, US dollar and yen Libor settings,” ISDA said, adding that rate “fallbacks (i.e., to the adjusted risk-free rate plus spread) will automatically occur for outstanding derivatives contracts that incorporate the IBOR Fallbacks Supplement or are subject to adherence of the ISDA 2020 IBOR Fallbacks Protocol” on the dates referenced above.

“The end of this long transition road is clear,” remarked Tom Wipf, chairman of the Alternative Reference Rates Committee, of which ABA is a member. “We now know when a representative USD Libor will end and what its associated spread adjustments will be in no uncertain terms. As the ARRC continues
driving the transition to [the Secured Overnight Financing Rate]forward, we have a straightforward plan for how this will work: with no new USD Libor contracts by the end of this year and further time for many legacy contracts to wind down.”