§5802 Definitions

Summary

Defines key words used when contracts move away from LIBOR to another rate. It says who publishes benchmarks, who picks or calculates replacement rates, what counts as LIBOR or similar IBOR rates, the official replacement date, the Fed Board’s chosen replacement (based on SOFR), and the exact spread adjustments for different LIBOR tenors. Key terms are: benchmark — an index of interest or dividend rates used to work out values or payments; benchmark administrator — a person who publishes a benchmark for others; benchmark replacement — a rate or benchmark that replaces LIBOR; benchmark replacement conforming changes — technical or administrative tweaks to make a Board‑selected replacement work in a contract; Board — the Board of Governors of the Federal Reserve System; Board‑selected benchmark replacement — the replacement the Board picks that uses SOFR and includes a tenor spread adjustment; calculating person — anyone who calculates amounts tied to a benchmark; consumer and credit — mean what federal law defining those words says; consumer loan — a consumer credit transaction; determining person — someone authorized to choose a replacement; fallback provisions — contract terms for picking a replacement and its start date; IBOR — LIBOR and similar interbank offered rates expected to end; IBOR benchmark replacement and IBOR contract — the IBOR versions of the replacement and the contracts that use IBOR; LIBOR — U.S. dollar overnight and 1‑, 3‑, 6‑, and 12‑month LIBOR (not the 1‑week or 2‑month tenors); LIBOR contract — any contract that uses LIBOR; LIBOR replacement date — the first London banking day after June 30, 2023, unless the Board sets a different date; security — as defined in federal securities law; SOFR — the Secured Overnight Financing Rate published by the Federal Reserve Bank of New York; tenor spread adjustment — 0.00644% (overnight), 0.11448% (1‑month), 0.26161% (3‑month), 0.42826% (6‑month), and 0.71513% (12‑month).