The FCA published this article on 4 January 2022 in respect of cessation of 24 LIBOR settings, and changed the publication methodology for the 6 most often used Sterling and Japanese yen settings.

The LIBOR settings that have now ended are: 

• all Euro and Swiss franc LIBOR settings
• the overnight / spot next, 1-week, 2-month and 12-month Sterling and Japanese yen LIBOR settings
• the 1-week and 2-month US dollar LIBOR settings

Six LIBOR settings (the 1, 3 and 6 month Sterling and Japanese yen LIBOR settings) are now permanently unrepresentative of the underlying market they seek to measure. This is because the panel of banks, which used to provide submissions to create these rates, has now ended. From 4 January, 2022, these 6 LIBOR settings will be calculated in a way that does not rely on submissions from panel banks, generally known as 'synthetic' LIBOR.

For further information, including the use of synthetic LIBOR and the prohibition on new use of US dollar LIBOR, please see this article from the FCA. Any contract that currently references synthetic LIBOR must be transitioned to the Risk Free Rate.

USD LIBOR continues to be published, but will end by June 2023. In line with the guidance from the FCA, Santander will no longer offer new contracts that reference USD LIBOR. In accordance with the guidance from the CFTC, Santander supports and will offer ‘SOFR’ to our clients. More information can be found in the CFTC announcement of 8^th June 2021.

We strongly encourage you to transition any contracts that reference USD LIBOR to the appropriate Risk Free Rate starting now, and in any case no later than June 2023. 

For more information, please speak to your usual Santander relationship contact.