LIBOR Transition

What is happening to LIBOR and what does it mean for you?

On March 5, 2021, the UK Financial Control Authority (FCA) and the ICE Benchmark Administration, regulator and administrator of LIBOR, respectively, confirmed that all U.S. Dollar LIBOR settings will cease to be published by June 2023. The announcements by the FCA and ICE Benchmark Administration provide clear and certain timelines for when LIBOR rates will no longer be available.

  • One-week and two-month USD LIBOR ceased to be published as of December 31, 2021
  • All other USD LIBOR settings (Overnight, 1-month, 3-month, 6-month, 12-month) will no longer be published after June 30, 2023.

The Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively, the “U.S. regulators”) have stated their support of this timeline. In addition, the U.S. regulators have stated that market participants should not issue new LIBOR transactions after December 31, 2021.

Frequently Asked Questions


London Interbank Offered Rate (LIBOR or ICE LIBOR) is an interest rate benchmark commonly used as a reference rate in several products and financial instruments, including corporate loans (bilateral and syndicated), floating-rate mortgages (or adjustable-rate mortgages), floating rate notes (FRNs), and securitized products. Historically, LIBOR has been published for five currencies and seven tenor points based on submissions from a group of panel banks, resulting in a publication of 35 rates each business day. ICE Benchmark Administrator (IBA) is the administrator for ICE LIBOR. IBA is authorized and regulated by the United Kingdom’s Financial Conduct Authority (FCA).

  • Five currencies—U.S. Dollar, Euro, British Pound, Japanese Yen, and Swiss Franc.
  • Seven tenors—Overnight, one week, and one, two, three, six, and twelve months.

U.S. Dollar LIBOR (USD LIBOR) is the most commonly used reference rate of all the ICE LIBOR rates. It is estimated that $200 trillion of financial products reference USD LIBOR, of which derivatives account for 95% of this value.


LIBOR is calculated and published based on submissions by panel banks and is an indicator of unsecured borrowing cost in the interbank markets. However, since the Global Financial Crisis of 2008, transactions in the interbank market have declined. Hence, the submission by panel banks is not informed by transactions in the interbank market and is based on expert judgment.

In July 2017, the FCA highlighted that panel banks are increasingly reluctant to submit LIBOR quotes based on expert judgment and the continuation of LIBOR cannot be guaranteed.

In response, the Federal Reserve mobilized the Alternative Reference Rates Committee (ARRC) with participation across a wide set of market participants (banks, asset managers, corporate treasurers, and industry trade associations) to select an alternative reference rate to USD LIBOR and guide the transition away to alternative reference rates. Huntington is a member of the ARRC and contributes to several ARRC working groups.


The ARRC recommended the Secured Overnight Financing Rate (SOFR) as the preferred alternate to USD LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities. SOFR is based on the U.S. Treasury Repo (repurchase) market which is a deep and liquid market with over $900 billion1 in average daily volumes. Each business day, the Federal Reserve Bank of New York publishes2 SOFR on its website at approximately 8:00am ET.

SOFR was first published in April 2018. In addition to SOFR, a range of alternative reference rates are available for use by different market participants. Huntington endorses the decision of the ARRC and now provides SOFR products and financial instruments.


On March 5, 2021, the FCA announced the cessation dates for the end of LIBOR:

  • 1-week and 2-month USD LIBOR ceased to be published as of December 31, 2021; and
  • All other USD LIBOR (Overnight, 1-month, 3-months, 6-months, and 12-months) will no longer be published after June 30, 2023

The FCA has confirmed that all USD LIBOR settings will either cease to be provided by any administrator or will no longer be representative as of these dates. Further, any USD LIBOR setting extrapolated from the above official tenor points will also cease after June 30, 2023 (e.g., 9 months USD LIBOR extrapolated from 6 months and 12 months). In addition, the Federal Reserve Board, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (collectively referred to as the “US regulators”) issued statements on November 30, 2020 and October 20, 2021 highlighting that:

  • Legacy transactions can continue using USD LIBOR until June 30, 2023 (for all tenor fixings other than 1-week and 2-month USD LIBOR); and
  • USD LIBOR should not be used for any new transactions after December 31, 2021.

The FCA has stated that USD LIBOR is expected to be representative until the announced cessation dates.

In addition to USD LIBOR, all British Pound, Euro, Swiss Franc and Japanese Yen LIBOR settings ceased to be published as of December 31, 2021.

Huntington’s LIBOR Transition timelines are well-aligned to the above guidance.


The main differences between USD LIBOR and SOFR are:

Term vs. Overnight: Historically, USD LIBOR has been published for seven forward-looking tenors (Overnight, one-week, one-month, two-months, three- months, six-months, and tweleve-months), whereas SOFR is an overnight rate. The ARRC has selected CME Group to administer forward-looking term rates based on SOFR. Huntington is offering both overnight and term SOFR products.

Unsecured vs. Secured: USD LIBOR is an unsecured rate at which banks borrow in the interbank market (i.e., no collateral is pledged against the interbank loan). SOFR is based on transactions in the repo markets which are secured by U.S. Treasury securities; it is deemed to be a near-risk free rate (RFR). SOFR does not have a credit premium incorporated, whereas USD LIBOR embeds a credit spread reflecting banks’ unsecured cost of borrowing. Historically, USD LIBOR increased during periods of market stress as a reflection of higher risk of unsecured interbank transactions. SOFR is expected to decline during periods of market stress due to flight to quality (increase in demand for US Treasury securities). Hence, the spread on SOFR transactions is expected to be higher than USD LIBOR transactions to reflect the differences between the two reference rates.


The impact of USD LIBOR transition can be classified into two themes (1) readiness to transact in new products, instruments and services referencing alternative reference rates (e.g., SOFR) and (2) remediation of legacy transactions referencing USD LIBOR that mature after the cessation of LIBOR.

  • Huntington is issuing products and financial instruments referencing alternative reference rates, including SOFR. In line with the guidance from U.S. regulators, as of December 31, 2021, Huntington has ceased issuance of products and instruments referencing USD LIBOR.
  • Huntington will coordinate with clients and counterparties to incorporate the appropriate fallback language in all legacy USD LIBOR agreements and amendments, if it is not already in place.
  • Huntington will engage with clients and counterparties to proactively transition contracts away from USD LIBOR ahead of the cessation date.

Huntington encourages all clients and counterparties to review their exposure to USD LIBOR and engage with their financial services providers, including Huntington, to discuss the impact of USD LIBOR’s cessation on their transactions.


Fallback language refers to contractual provisions that lay out the process through which a replacement rate will be identified if a benchmark rate (e.g., USD LIBOR) is not available. Huntington may contact you prior to LIBOR’s cessation to modify your contract and add more robust fallback language.


In order to account for the differences between LIBOR and SOFR as a fallback rate, industry groups have recommended the use of a credit spread adjustment. For loan rates falling back from LIBOR to SOFR, the spread adjustment is needed to ensure comparability between the two rates for legacy transactions and minimize value transfer to the extent possible.

The recommended market approach by industry groups for determining the spread adjustment for derivative transactions, as well as non-consumer loans, is to calculate a historical five-year median difference between a given LIBOR setting and the compounded overnight SOFR rate.

The spread adjustments for LIBOR rates on derivative transactions and non-consumer loans were fixed and published by Bloomberg on March 5, 2021.


We would encourage all market participants with exposure to USD LIBOR to be informed on LIBOR transition by leveraging the following sources:

LIBOR Transition Resources

We would encourage all market participants with exposure to USD LIBOR to be informed on LIBOR transition by leveraging the following sources:

If you can’t find what you’re looking for, please let us know. We are ready to help.

$909B average daily trading volume, February 17, 2021 - March 16, 2021, FRBNY

Please note that the material presented herein is subject to change without notice. This material is provided solely for general informational purposes and with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering legal, accounting, tax, or other professional advice or services, or endorsing any third-party product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circumstances. This material was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circumstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THESE MATERISALS EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.