Libor Replacement Carries Risk for States and Cities, Group Says
- Muni finance officers group issues bulletin on benchmark shift
- ’There’s a whole world of costs here,’ says GFOA official
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The end of the London interbank offered rate after 2021 could have costly consequences for states and cities and managers need to start preparing, the Government Finance Officers Association said Thursday.
About $44 billion of floating-rate municipal bonds and an unknown amount of loans and interest-rate swaps entered into by states and cites are tied to the U.S. dollar Libor. Many of these securities and contracts will continue long after 2021, when Libor is phased out.