LIBOR replacement clauses

LIBOR replacement clauses are contract provisions that switch a financial or trade instrument from the London Interbank Offered Rate to a successor risk-free rate once LIBOR ceased to be published. They appear in ship-finance loans, charterparty interest terms, and trade-finance facilities, and typically nominate a replacement benchmark such as SOFR for US dollars or SONIA for sterling, plus a credit adjustment spread to keep economic value broadly neutral. Panel USD LIBOR settings ended on 30 June 2023, after sterling and other currency settings ceased at end-2021, so legacy contracts relied on these fallback clauses or on legislated synthetic rates to transition.