SB279 Summary

• Creates the "LIBOR Discontinuance and Replacement Act of 2021" establishing procedures for replacing U.S. dollar LIBOR with the Secured Overnight Financing Rate (SOFR) when LIBOR is discontinued.

• On the LIBOR replacement date, contracts without fallback provisions or with fallback provisions based on LIBOR values shall automatically use the recommended benchmark replacement (SOFR) by operation of law.

• Fallback provisions requiring polls, surveys, or inquiries about interbank lending rates are disregarded and deemed void upon a LIBOR discontinuance event.

• Provides safe harbor from litigation and liability for persons selecting or using recommended benchmark replacements and implementing conforming changes; such actions do not constitute breach of contract, discharge obligations, or provide grounds for termination.

• Establishes that the benchmark replacement is commercially reasonable and substantial equivalent to LIBOR, does not impair payment rights or timing, and does not constitute an amendment to the contract; act applies to all Alabama contracts notwithstanding other state law.