US Treasury – Treasury Department Releases Letter to Nonfinancial Corporate Stakeholders on LIBOR Transition

August 23, 2021 – In response letter from groups on concerns of nonfinancial corporations on transition from LIBOR to SOFR, alternative rates as deadline for LIBOR sundown approaches. Transition to take place in less than six months and there is need preparations.

Transition Challenges: Regulators acknowledged operational, technological, accounting, tax, legal challenges for non-financial corporations to transition, as well as the need for more clarity from the financial world. Regulators noted it was a problem that corporations could not obtain loan agreements based on SOFR, even if indicated loan agreements based on SOFR would be preferred. Appreciated the input from the nonfinancial corporations and worried that banks are still not offering alternative rates so late into the transition away from LIBOR.

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