(1) “Benchmark” means 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 a valuation, payment, or other measurement under or in respect of a contract, security, or instrument;(2) “Benchmark replacement” means a benchmark, or an interest rate or dividend rate, that may be based in whole or in part on a prior setting of LIBOR, to replace LIBOR or an 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”:
(A) Means 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 have been selected or recommended by a relevant recommending body; and(B) Includes, if, in the reasonable judgment of the calculating person, the benchmark replacement conforming changes selected or recommended pursuant to subdivision (3)(A) do not apply to the contract, security, or instrument or are insufficient to permit administration and calculation of the recommended benchmark replacement, other changes, alterations, or modifications that:
(i) 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(ii) Would not result in a disposition of the contract, security, or instrument for United States federal income tax purposes;(4) “Calculating person” means, with respect to a contract, security, or instrument, a person responsible for calculating or determining a valuation, payment, or other measurement based on a benchmark, and may be the determining person;(5) “Contract, security, or instrument” means a contract, agreement, mortgage, deed of trust, lease, instrument, other obligation, or security, whether representing debt or equity, and including an interest in a corporation, a partnership, or a limited liability company;(6) “Determining person” means, with respect to a contract, security, or instrument, in the following order of priority:
(A) A person so specified; or(B) A person with the authority, right, or obligation to do the following:
(i) Determine the benchmark replacement that will take effect on the LIBOR replacement date;(ii) Calculate or determine a valuation, payment, or other measurement based on a benchmark; or(iii) Notify other persons of a LIBOR replacement date or a benchmark replacement;(7) “Fallback provisions” means terms in a contract, security, or instrument that set forth a methodology or procedure for determining a benchmark replacement, including 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” means, for purposes of the application of this chapter to a particular contract, security, or instrument, United States dollar LIBOR, formerly known as the London Interbank Offered Rate, as administered by ICE Benchmark Administration Limited, or a predecessor or successor thereof, and a tenor thereof, as applicable, that is used in making a calculation or determination thereunder;(9) “LIBOR replacement date”:
(A) Means:
(i) In the case of one-week and two-month tenors of LIBOR, the effective date of this act; and(ii) In the case of all other tenors of LIBOR, the first London banking day after June 30, 2023, unless the relevant recommending body determines that the other LIBOR tenors will cease to be published or cease to be representative on a different date; and(B) Does not mean a date that affects one (1) or more tenors of LIBOR with respect to a contract, security, or instrument that:
(i) Provides for only one (1) tenor of LIBOR, if the contract, security, or instrument requires interpolation and the affected tenor can be interpolated from LIBOR tenors that are not so affected; or(ii) Permits a party to choose from more than one (1) tenor of LIBOR and any of the tenors is not so affected or, if the contract, security, or instrument requires interpolation, the affected tenor can be interpolated from LIBOR tenors that are not so affected;(10) “Recommended benchmark replacement” means a benchmark replacement based on SOFR, including a recommended spread adjustment and benchmark replacement conforming changes, that has been selected or recommended by a relevant recommending body with respect to the type of contract, security, or instrument;(11) “Recommended spread adjustment” means a spread adjustment, or method for calculating or determining the spread adjustment, that:
(A) Has 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; and(B) May be a positive or negative value or zero (0);(12) “Relevant recommending body” means the federal reserve board, the federal reserve bank of New York, or the Alternative Reference Rates Committee, or a successor to those entities; and(13) “SOFR” means with respect to a day, the secured overnight financing rate published for that 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.
