AL Code § 5-28-2 (2021)
2021 Code of Alabama|Title 5 - Banks and Financial Institutions.|Chapter 28 - Libor Discontinuance and Replacement Act of 2021|Section 5-28-2 - This Section Was Assigned by the Code Commissioner in the 2021 Regular Session, Effective April 29, 2021. This Is Not in the Current Code Supplement.

Section 5-28-2THIS SECTION WAS ASSIGNED BY THE CODE COMMISSIONER IN THE 2021 REGULAR SESSION, EFFECTIVE APRIL 29, 2021. THIS IS NOT IN THE CURRENT CODE SUPPLEMENT.  As used in this chapter, the following terms shall have the following meanings: (1) BENCHMARK. An index of interest rates or dividend rates that is used, in whole or in part, as the basis of, or as a reference for, calculating or determining any valuation, payment, or other measurement under or in respect of a contract, security, or instrument. (2) BENCHMARK REPLACEMENT. A benchmark, or an interest rate or dividend rate, which may or may not be based in whole or in part on a prior setting of LIBOR, to replace LIBOR or any interest rate or dividend rate based on LIBOR, whether on a temporary, permanent, or indefinite basis, under or in respect of a contract, security, or instrument. (3) BENCHMARK REPLACEMENT CONFORMING CHANGES. With respect to any type of contract, security, or instrument, any technical, administrative, or operational changes, alterations, or modifications that are associated with and reasonably necessary to the use, adoption, calculation, or implementation of a recommended benchmark replacement and that both: a. Have been selected or recommended by a relevant recommending body; and b. If, in the reasonable judgment of the calculating person, the benchmark replacement conforming changes selected or recommended pursuant to paragraph a. do not apply to the contract, security, or instrument or are insufficient to permit administration and calculation of the recommended benchmark replacement, then benchmark replacement conforming changes shall include other changes, alterations, or modifications that, in the reasonable judgment of the calculating person, are necessary to permit administration and calculation of the recommended benchmark replacement under or in respect of the contract, security, or instrument in a manner consistent with market practice for substantially similar contracts, securities, or instruments and, to the extent practicable, the manner in which the contract, security, or instrument was administered immediately prior to the LIBOR replacement date; and would not result in a disposition of the contract, security, or instrument for U.S. federal income tax purposes. (4) CALCULATING PERSON. With respect to any contract, security, or instrument, any person responsible for calculating or determining any valuation, payment, or other measurement based on a benchmark. This person may be the determining person. (5) CONTRACT, SECURITY, OR INSTRUMENT. Includes, without limitation, any contract, agreement, mortgage, deed of trust, lease, instrument, other obligation, or security, whether representing debt or equity, and including any interest in a corporation, a partnership, or a limited liability company. (6) DETERMINING PERSON. With respect to any contract, security, or instrument, in the following order of priority: a. Any person so specified. b. Any person with the authority, right, or obligation to do any of the following: 1. Determine the benchmark replacement that will take effect on the LIBOR replacement date. 2. Calculate or determine a valuation, payment, or other measurement based on a benchmark. 3. Notify other persons of the occurrence of a LIBOR discontinuance event, a LIBOR replacement date, or a benchmark replacement. (7) FALLBACK PROVISIONS. Terms in a contract, security, or instrument that set forth a methodology or procedure for determining a benchmark replacement, including any terms relating to the date on which the benchmark replacement becomes effective, without regard to whether a benchmark replacement can be determined in accordance with the methodology or procedure. (8) LIBOR. For purposes of the application of this chapter to any particular contract, security, or instrument, U.S. dollar LIBOR, formerly known as the London Interbank Offered Rate, as administered by ICE Benchmark Administration Limited, or any predecessor or successor thereof, or any tenor thereof, as applicable, that is used in making any calculation or determination thereunder. (9) LIBOR DISCONTINUANCE EVENT. The earliest to occur of any of the following:  a. A public statement or publication of information by, or on behalf of, the administrator of LIBOR announcing that the administrator has ceased or will cease to provide LIBOR, permanently or indefinitely, provided that, at the time of the statement or publication, there is no successor administrator that will continue to provide LIBOR. b. A public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the United States Federal Reserve System, an insolvency official with jurisdiction over the administrator for LIBOR, a resolution authority with jurisdiction over the administrator for LIBOR, or a court or an entity with similar insolvency or resolution authority over the administrator for LIBOR, which states that the administrator of LIBOR has ceased, or will cease, to provide LIBOR permanently or indefinitely, provided that, at the time of the statement or publication, there is no successor administrator that will continue to provide LIBOR. c. A public statement or publication of information by the regulatory supervisor for the administrator of LIBOR announcing that LIBOR is no longer representative. For purposes of this definition, a public statement or publication of information that affects one or more tenors of LIBOR shall not constitute a LIBOR discontinuance event with respect to any contract, security, or instrument that does either of the following: 1. Provides for only one tenor of LIBOR, if the contract, security, or instrument requires interpolation and the tenor can be interpolated from LIBOR tenors that are not so affected. 2. Permits a party to choose from more than one tenor of LIBOR and any of the tenors is not so affected or if the contract, security, or instrument requires interpolation, can be interpolated from LIBOR tenors that are not so affected. (10) LIBOR REPLACEMENT DATE. a. In the case of a LIBOR discontinuance event described in paragraph (9)a. or (9)b., the later of: 1. The date of the public statement or publication of information referenced therein.  2. The date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR. b. In the case of a LIBOR discontinuance event described in paragraph (9)c., the date of the public statement or publication of information referenced therein. For purposes of this chapter, a date that affects one or more tenors of LIBOR shall not constitute a LIBOR replacement date with respect to any contract, security, or instrument that does either of the following: 1. Provides for only one tenor of LIBOR, if the contract, security, or instrument requires interpolation and the tenor can be interpolated from LIBOR tenors that are not so affected. 2. Permits a party to choose from more than one tenor of LIBOR and any of the tenors is not so affected, or if the contract, security, or instrument requires interpolation, can be interpolated from LIBOR tenors that are not so affected. (11) RECOMMENDED BENCHMARK REPLACEMENT. With respect to any particular type of contract, security, or instrument, a benchmark replacement based on SOFR, which shall include any recommended spread adjustment and any benchmark replacement conforming changes, that shall have been selected or recommended by a relevant recommending body with respect to the type of contract, security, or instrument. (12) RECOMMENDED SPREAD ADJUSTMENT. A spread adjustment, or method for calculating or determining the spread adjustment, that shall have been selected or recommended by a relevant recommending body for a recommended benchmark replacement for a particular type of contract, security, or instrument and for a particular term to account for the effects of the transition or change from LIBOR to a recommended benchmark replacement. This term may be a positive or negative value or zero. (13) RELEVANT RECOMMENDING BODY. The Federal Reserve Board, the Federal Reserve Bank of New York, or the Alternative Reference Rates Committee, or any successor to any of them. (14) SOFR. With respect to any day, the secured overnight financing rate published for the day by the Federal Reserve Bank of New York, as the administrator of the benchmark, or a successor administrator, on the Federal Reserve Bank of New York's website. (Act 2021-323, §1.)