The U.K. Financial Conduct Authority (the “FCA”) announced on July 27, 2017 that it expects to eliminate the London Interbank Offered Rate (commonly known as “LIBOR”) as a benchmark rate by 2021. No hard deadline has been provided as of this writing. The FCA’s announcement comes as no surprise: the news media has reported over the last several year on the replacement of the British Banker’s Association (“BBA”) as administrator of LIBOR with the Intercontinental Exchange Benchmark Administration Limited (“ICE”), allegations of potential market manipulation and, more recently, the impending demise of LIBOR as a benchmark rate for pricing floating-rate loan agreements, interest rate hedges and other derivatives transactions.

LIBOR is a benchmark interest rate derived from daily interest rate submissions from a number of banks of the unsecured cost to borrower from other banks. “Customary” bank-to-bank interest rates range from one, three and six months up to 12 months for multiple currencies, including U.S.Dollars.