Arnold & Porter Discusses U.S. Treasury’s Proposed Regulations on Tax Issues Regarding LIBOR’s End

On October 9, 2019, the US Department of the Treasury (Treasury Department) issued proposed regulations (Proposed Regulations) regarding tax issues relating to the anticipated discontinuance of the London interbank rate (LIBOR) after the 2021 calendar year. The Proposed Regulations are taxpayer-friendly and intended to prevent disruptions in the financial market.

Background

LIBOR has been extensively used as an interest rate benchmark in debt instruments (such as loan agreements and bonds) and other financial instruments (such as swaps and other derivatives). In July 2017, the UK regulator tasked with overseeing LIBOR announced that it can only commit to sustain LIBOR until … Read more