SB279 Alabama 2021 Session

This bill would enact provisions relating to the discontinuance of LIBOR, the London Interbank Offered Rate, a benchmark for short-term interest rates, discount rates, or dividend rates used in certain financial contracts.

This bill would prohibit parties to a contract, security, or instrument from refusing to perform contractual obligations or declaring a breach of contract as a result of the discontinuance of LIBOR or the use of a replacement interest rate index for LIBOR.

This bill would also provide a safe harbor from litigation for the use of a recommended benchmark replacement.

Relating to financial transactions; to add Chapter 28, commencing with Section 5-28-1, to Title 5 of the Code of Alabama 1975; to provide that parties to a contract would be prohibited from refusing to perform contractual obligations or declaring a breach of contract as a result of the discontinuance of the London Interbank Offered Rate or the use of a replacement interest rate index that is a replacement interest rate index to LIBOR; to provide for replacement interest rate indexes to LIBOR; and to provide a safe harbor from litigation for the use of the recommended benchmark replacement.