In a series of groundbreaking announcements back in November 2020, the IBA (administrator of LIBOR) communicated intentions to cease its LIBOR publication on all major currencies. The London Inter-Bank Offered Rate (LIBOR) is a benchmark interest rate that major global financial institutions lend to one another. LIBOR will gradually phase out by the end of 2021, which is approaching rapidly as businesses across the globe look to closing out the final quarter and another uncertain year.
The discontinuation of LIBOR is the most wide-reaching reform in the banking and financial industry, and its effects will be seen in a wide variety of organizations and industries. Discover why the discontinuation of LIBOR matters to lawyers and how Morningside can help.
THE CURRENT STATE OF LIBOR
In a series of announcements, the administrator of LIBOR laid out two critical dates for the intention to cease the LIBOR publication. Five major currencies CHF, EUR, GBP, JPY EUR, and USD 1W and 2M tenor, will end December 31st, 2021. All other USD tenors are scheduled to end on June 30th, 2023.
The 18-month extension to USD LIBOR is the most significant update to the transition process since the initial announcement to allow for more time to discontinue legacy use properly.
WHY LIBOR MATTERS
The process of addressing the countless contracts and LIBOR-reliant deals, especially ones drafted and executed in non-English foreign languages, has created tension on financial firms and in-house legal teams. There will inevitably be situations that arise due to LIBOR that will increase litigation. Given the value of LIBOR to the market, it is likely that regulators or industry bodies will be seeking guidance from the courts. Talk among the legal industry indicates a rise in contractual interpretation disputes, securities and misselling claims, and revisions of mergers and acquisitions.
Legacy deals will prove an even more significant challenge for legal teams because they will still be in effect post-LIBOR and thus will need to be amended and remediated. The regulating bodies have made clear that no new LIBOR exposure should be opened after December 2021, unless for a set of limited circumstances. For international financial institutions and their legal teams, this could mean analyzing tens of thousands of foreign language documents to determine if amendments are needed in multiple languages.
HOW WE CAN HELP
We provide translation services for contracts and agreements and offer automated translation solutions for high-volume projects. Whether you are starting your due diligence process or need to finalize the foreign language amendments, Morningside has the language solution to fit your needs by lowering costs and accelerating turnaround times for legal translation projects where time or budget is limited. Multilingual document review and foreign language coding services are also available.
International law firms and Global 500 legal departments worldwide rely on Morningside for professional legal translators. We are entrusted to deliver accurate legal translation services for our client’s projects. We employ certified linguists with extensive subject matter expertise and a deep understanding of country-specific legal terminology.
We are a top choice for law firms and in-house legal teams for accurate, time-sensitive legal translations in 200+ languages. We are backed by our proprietary QA workflow and the industry’s most carefully vetted and experienced legal translators.
Our professional legal translators are ready to help with your next project. Contact Morningside today to request a quote.