SB0371: Replacement of the London Interbank Offered Rate.

Legislative Summary

Replacement of the London Interbank Offered Rate. Adds provisions to the title in the Indiana Code concerning financial institutions to provide for the replacement, by operation of law, of the United States Dollar LIBOR as the benchmark index for any contract, security, or instrument, with a recommended benchmark replacement that is based on the secured overnight financing rate (SOFR). Sets forth certain events that serve to trigger the replacement of LIBOR with the recommended benchmark replacement. Specifies that such replacement by operation of law applies with respect to a contract, security, or instrument that either: (1) contains no fallback provisions setting forth a methodology or procedure for determining a benchmark replacement; or (2) contains fallback provisions that result in a benchmark replacement that: (A) is not a recommended benchmark replacement; and (B) is based in any way on any LIBOR value. Provides that if a recommended benchmark replacement becomes the benchmark replacement for any contract, security, or instrument, any applicable benchmark replacement conforming changes become an integral part of the contract, security, or instrument by operation of law. Provides that the bill's provisions do not alter or impair contracts, securities, or instruments that contain certain provisions. Provides that the selection or use of a recommended benchmark replacement as a benchmark replacement for a contract, security, or instrument: (1) constitutes a commercially reasonable replacement for and a commercially substantial equivalent to LIBOR; and (2) does not: (A) impair or affect certain rights and performance obligations under; (B) constitute a breach of; or (C) void or nullify; the contract, security, or instrument. Provides that a person is not liable for damages, and is not subject to any claim for equitable relief, in connection with: (1) the selection or use of a recommended benchmark replacement; or (2) the determination, implementation, or performance of benchmark replacement conforming changes; with respect to any contract, security, or instrument. Makes a cross reference to this immunity provision in the chapter of the Indiana Code that lists statutes outside of Title 34 of the Indiana Code that confer civil immunity.