LIBOR Resource Center

LIBOR Resource Center

What is LIBOR?

The London Interbank Offered Rate (LIBOR) is a global benchmark interest rate calculated daily, and is the most widely used benchmark in the capital markets. State and local governments often see this rate in swaps/derivatives products intertwined with municipal debt, as well as in floating rate notes, lease contracts, bank loans, direct placements, and other types of financings and credit enhancements.

All tenors of LIBOR will end on June 30, 2023.

State and local governments need to know that existing contracts that reference LIBOR will need to be revised to perform as intended and new contracts will have to reference a new benchmark, such as the Secured Overnight Financing Rate (SOFR).

GFOA Releases Advisory on LIBOR Transition

GFOA's Executive Board approved an Advisory on March 5, 2021.

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Understanding SOFR Calculations

For existing LIBOR contracts, state and local governments should review the applicable contract documents to ensure the document provisions contain sufficient language to enable the contracts to perform as intended after LIBOR ceases to be published or reference a new benchmark, such as SOFR.

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LIBOR References in Bank Loan or Privately Placed Debt Contracts

Together with several industry associations, GFOA has published a simple how-to for GFOA members unwinding their LIBOR-referenced bank loan contracts.

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LIBOR and the ISDA Protocol Top Ten

Ten questions you have about the ISDA Protocol but didn’t know how to ask.

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How is GFOA Involved?

The Federal Reserve along with the Federal Reserve of New York, has established a working group with GFOA and other stakeholder groups – the Alternative Reference Rates Committee (ARRC) – to ensure a transition for the financial markets from LIBOR to a new rate, the Secured Overnight Financing Rate (SOFR). In some cases, state and local governments may see other rates used for some financing products. The ARRC is comprised of a diverse set of private-sector entities that have an important presence in markets affected by USD LIBOR and a wide array of official-sector entities, including banking and financial sector regulators, as ex-officio members.

Where to find your LIBOR exposure?

Governments should make a list of all potential sources of exposure and track throughout 2021. Check off exposures that have been eliminated. Also, remember that some contracts may require governing board approval for change and issuers should make time for that process. In addition, GFOA recommends that you call your municipal/swap advisor and bond counsel prior to making any changes.

1. Swaps/Derivatives

2. Bank Loans

3. Floating Rate Notes

4. Direct Placements

5. Letters of Credit

6. Purchasing Cards

7. Intergovernmental Fund

8. Lines of Credit / Revolving Credit Agreements

9. Lease Contracts

10. Variable Rate Demand Bonds / Obligations (VRDOs)

11. Conduit Loans where the Government is the Lender (bond banks)

12. Investment Products, including Guaranteed Investment Products (GICs)

On the Hunt for LIBOR

This resources explains where to find your exposure and what to do about it. It is a quick and easy guide to help you determine some of the more common areas governments could experience LIBOR exposure.

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Other Resources

Issuer FAQ for LIBOR Transition

GFOA staff answers several common questions from governments on the LIBOR transition.

View FAQ

LIBOR's Coming Extinction

GFR Article by Todd Buikema from December 2020.

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Background on LIBOR and SOFR

GFR Article by Emily Brock from October 2019.

Read Article

ISDA Resource: Benchmark Reform and the Transition from LIBOR

This page will be updated on a regular basis as relevant information becomes available globally and will serve as the central repository for information from ISDA relating to financial benchmark reform and the transition from LIBOR.

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